Let's not over-react here. 0.5% is not terribly worse for easy money than 0.25%. By historical standards, this is still very cheap money, cheap enough to rebuild the crumbling and crumbled infrastructure of this country, provided that politicians had the will and the guts to do something about it.
1
Several years ago, and on numerous occasions i suggested that the Government borrow several trillion dollars at 1.5 to 2.5 % interest on 25 year obligations. Than the Government should take that money and PAY OFF several trillions of Long Term, HIGH (est) Interest rated bonds. Yes we would still be in debt for the several ( I had envisioned 5 Trillion) debt, BUT we would have saved the spread in the existing 6,7,9 or more percent rates on the bonds. This would have reduced the debt by SEVERAL TRILLION Dollars. Nut that was to simple for politicians to deal with. Better to shut the Government down and cost the taxpayers 24 Billion in higher interest than to do what is best for the Nation.
Yes, but... Yes, there was, and still is, cheap money available. What was missing in the private sector was the demand side of the supply-demand equation. The lack of demand doesn't incentivize the private sector to spend on creating new products or capacity that is already under utilized.
The public sector requires political will. Unfortunately, American political will has been lacking for a very long time. Consider that a lot of the deteriorating infrastructure was installed during the Great Depression with dictum of "If it isn't broken, don't fix it" running the political class. Here again, cheap money doesn't create the demand required. The only voices that seem to be listened to are those calling for the elimination of taxation which translates into zero government spending (with the exception of declaring war on somebody).
No demand mixed with no political will translates into a society that shrinks smaller and smaller until it disappears. I guess that is what the conservatives really want - for the USA to disappear to be replaced with a money based royal class of rich despots.
The public sector requires political will. Unfortunately, American political will has been lacking for a very long time. Consider that a lot of the deteriorating infrastructure was installed during the Great Depression with dictum of "If it isn't broken, don't fix it" running the political class. Here again, cheap money doesn't create the demand required. The only voices that seem to be listened to are those calling for the elimination of taxation which translates into zero government spending (with the exception of declaring war on somebody).
No demand mixed with no political will translates into a society that shrinks smaller and smaller until it disappears. I guess that is what the conservatives really want - for the USA to disappear to be replaced with a money based royal class of rich despots.
This is what happens with short term thinking, in which politicians can only look to the next few years in their term, and a government hamstrung with only two terms, where everyone is forever in campaign mode. No one wants to be held responsible for humongous projects (in particular, infrastructure) that last for decades, with high risks of failure, and even if the projects are a success, no one will attribute that to the foresight to the ones who stick their neck out to see to it that the projects get green light. With voters forever cash-strapped, no one has any appetite for big budget items (except when it comes to Pentagon, it would seem).
This is exactly the kind of Wall St mentality that forces public companies to think only about what would impact on their next quarterly earnings. Afterall, how many CEO's have the luxury like Jeff Bezos or Elon Musk do where their strategy is so long term that it can take years for the strategy to take hold? How many CEO's have the stature and muscle to say no to Wall St?
This is exactly the kind of Wall St mentality that forces public companies to think only about what would impact on their next quarterly earnings. Afterall, how many CEO's have the luxury like Jeff Bezos or Elon Musk do where their strategy is so long term that it can take years for the strategy to take hold? How many CEO's have the stature and muscle to say no to Wall St?
2
I propose that we when we pay for these delayed infrastructure projects in the future, as we must, that the taxes levied to compensate for the increased cost be termed "Tea Party Taxes" to underscore the needless waste of waiting to build at higher cost what could have been financed over the last decade at net inflation negative interest rate (nominal interest less inflation) to the taxpayer. If nothing else, it might be a lesson learned for the public to not listen to those who know nothing about the "magic" process whereby everything in sight comes into being. (Hint: it had nothing to do with either market forces or living within our means.)
3
Money was cheap and corporations used the nominal interest loans to lever up their balance sheets and repurchase stock.
Execs did fine with their options as earnings per share rose due to decreasing floats of outstanding shares.
In the meantime, there often was no meaningful top line growth of revenue nor was there job growth that would be gained through cap ex spending and growing market share.
Now we will see which companies actually grew while those that repurchased and can no longer do so now that the punch bowl is being taken away will have repurchased stock at inflated prices due to their own buying spree.
Execs did fine with their options as earnings per share rose due to decreasing floats of outstanding shares.
In the meantime, there often was no meaningful top line growth of revenue nor was there job growth that would be gained through cap ex spending and growing market share.
Now we will see which companies actually grew while those that repurchased and can no longer do so now that the punch bowl is being taken away will have repurchased stock at inflated prices due to their own buying spree.
2
There's still time. Interest rates will be low for a while and materials like steel and cement are at their lowest prices since 2009.
The weak link is the "freedom caucus".
The weak link is the "freedom caucus".
3
A structure that carries railroad trains across a river and other impediments is called a trestle. There's one crossing the Mississippi River in downtown Saint Paul, Minnesota that dates to about 1890, a hundred and twenty years ago. It will no doubt last another hundred years. If it ain't broke, don't fix it.
Um - does that get anywhere near the level of traffic as the Portal Bridge?
It was, and still is, a no-brainer. Maybe that explains why we haven't done it.
3
I'm really disappointed that low interest rates for so long were used by corporations to buy-back their stocks - greatly increasing the concentration of wealth (and corporate power) among the few while inflating stock prices. The Fed raised interest rates based on rising inflation figures that are still below their target. BUT, the quality of that inflation is concentrated in housing, healthcare and insurance. These are industries were competition is not perfect.
In the case of housing, many foreign buyers, or wealthy buyers who are using property as investments have pushed house prices to up (especially in big cities with foreign buyers: New York, LA and Miami). What happens to native citizens? - we are crowded increasingly into rentals, forcing rents to increase, too. This is no longer a "weak housing market", so much as a "distorted housing market." High levels of student loan debt and job insecurity have also played their part in distorting the housing and rental markets even as prices rise.
In the health care industry, there is no accountability. Even Medicare cannot negotiate on prices! So naturally prices will rise irrespective of the state of the economy - yet these figures, from a very uncompetitive market, affects the inflation figures that the Fed uses to raise rates. True competition, better regulations would have seen inflation in these markets stay checked, and thus hold the fed back.
In the case of housing, many foreign buyers, or wealthy buyers who are using property as investments have pushed house prices to up (especially in big cities with foreign buyers: New York, LA and Miami). What happens to native citizens? - we are crowded increasingly into rentals, forcing rents to increase, too. This is no longer a "weak housing market", so much as a "distorted housing market." High levels of student loan debt and job insecurity have also played their part in distorting the housing and rental markets even as prices rise.
In the health care industry, there is no accountability. Even Medicare cannot negotiate on prices! So naturally prices will rise irrespective of the state of the economy - yet these figures, from a very uncompetitive market, affects the inflation figures that the Fed uses to raise rates. True competition, better regulations would have seen inflation in these markets stay checked, and thus hold the fed back.
2
You do realize that companies have a fiduciary duty to increase shareholder value, right? That is the purpose of a corporation - they did exactly what they were supposed to do.
house prices to rise somewhat? You're kidding right? I just sold a house I bought in 1998 for three times what I paid for it. I know, anecdotal, but house prices in a great number of markets are even frothier now than in 2006. Ask folks living in the paper's hometown.
Low interest rates powered the housing bubble, and before that, the stock and bond market bubble. All three have now recovered to the bubbly stratosphere. There's only one way to go from here--up--right?
Corporations don't borrow to invest when there is nothing worth investing in and there is nothing worth investing in when demand is not increasing. All the interest rate tinkering by the Fed ain't gonna make that horse drink.
Low interest rates powered the housing bubble, and before that, the stock and bond market bubble. All three have now recovered to the bubbly stratosphere. There's only one way to go from here--up--right?
Corporations don't borrow to invest when there is nothing worth investing in and there is nothing worth investing in when demand is not increasing. All the interest rate tinkering by the Fed ain't gonna make that horse drink.
1
I wonder why all those arrogant, whining, Republican "job creators" didn't do their business while rates were low. Oh, I know. Because it would create jobs, and improve the general welfare. Not really part of the Republican "long term plan."
7
I'll remind you that the Dems were in complete control of the Federal government for about a two-year stretch beginning in 2009. They could basically do whatever they wanted as evidenced by the passage of Obamacare. They also passed a stimulus bill worth close to $1 trillion dollars, with the promise that there were a multitude of "shovel-ready" projects with which to use the funds. Later, Obama, laughingly told us that there weren't so many shovel-ready projects after all. The point being that the Dems could have done whatever they wanted and instead delivered a stimulus that was so in name only.
The Dems are at least as much to blame about the lack of true infrastructure investment as are the Republicans.
The Dems are at least as much to blame about the lack of true infrastructure investment as are the Republicans.
1
America grew by supporting its rural towns with supplements for transportation and infrastructure. Regulations used to mandate near universal service by airlines and rail. The false economy of ending these critical arteries of prosperity in the name of privatization should be reversed. If a candidate wants to regain more rural support for their party, this is an unexplored opportunity. Craft a balanced approach and inform rural America they are a valued part of our mutual path to revitalization.
4
Once rural American tells its politicians to stop voting against the major metros areas who are the ones subsidizing them! (Think NY-Boston-San Fran)
Government certainly has it share of problems. But as a purely economic argument "low rates" are not all they are cracked up to be. What really matters in investing is the "real interest rate" Interest rates Minus Inflation" That is the real rate of return on an investment. Whats the difference if you Make 10% on your money but inflation is 9% or you make 1% and inflation in 0%. You net 1% real increase in buying power in both instances and that is what really counts.
In the past several years we have gone through a period of almost no inflation or deflation at some times. So if the cost of money is at 2% but inflation is running at 0% the money really costs 2% and that is a worse interest rate than the past decades. The underlying economics really stay the same people are really just fooled by "low interest rates" since they are not good at factoring in inflation.
In the past several years we have gone through a period of almost no inflation or deflation at some times. So if the cost of money is at 2% but inflation is running at 0% the money really costs 2% and that is a worse interest rate than the past decades. The underlying economics really stay the same people are really just fooled by "low interest rates" since they are not good at factoring in inflation.
1
1 billion? It's a 900 foot bridge!
I'm as much for investment as anyone, and upset about our decaying infrastructure, but I can't help but think that we've also made it way too hard to build.
A quote from an article on the Bay Bridge:
"Put another way, the entire 1936 crossing cost $30,000 a foot in adjusted 2013 dollars while the shorter new span is setting back taxpayers $550,000 per foot."
This bridge replacement is scheduled to cost approximately 1 million a foot. Using the above quote, in the 1930s building a bridge was approximately 20X cheaper. Think this bridge would have been rebuilt if it cost 50 million instead of a billion?
I get it that there are compromises to be made here - in the 1930s, many construction workers died, there was no environmental study, etc. But I can't believe that those concerns justify spending 20X as much on every bridge we build - shouldn't we also be able to take advantage of vast improvements in technology today to lower the cost? We will never get anything done and compete unless that part of the equation is fixed.
I looked at China - they built a 26 mile bridge a few years ago, and using the high end cost estimate it cost around 60,000 a foot.
Obviously my analysis is flawed in terms of the actual numbers - but the point remains - we are too wasteful.
I'm as much for investment as anyone, and upset about our decaying infrastructure, but I can't help but think that we've also made it way too hard to build.
A quote from an article on the Bay Bridge:
"Put another way, the entire 1936 crossing cost $30,000 a foot in adjusted 2013 dollars while the shorter new span is setting back taxpayers $550,000 per foot."
This bridge replacement is scheduled to cost approximately 1 million a foot. Using the above quote, in the 1930s building a bridge was approximately 20X cheaper. Think this bridge would have been rebuilt if it cost 50 million instead of a billion?
I get it that there are compromises to be made here - in the 1930s, many construction workers died, there was no environmental study, etc. But I can't believe that those concerns justify spending 20X as much on every bridge we build - shouldn't we also be able to take advantage of vast improvements in technology today to lower the cost? We will never get anything done and compete unless that part of the equation is fixed.
I looked at China - they built a 26 mile bridge a few years ago, and using the high end cost estimate it cost around 60,000 a foot.
Obviously my analysis is flawed in terms of the actual numbers - but the point remains - we are too wasteful.
5
The Chinese bridge goes nowhere and is just a public works project. We will know in the future if that bridge is safe and sound. The Chinese steel rivets purchased for the Bay Bridge repairs had to be replaced with American made steel rivets. China has no steel making credibility, nor does it have any experience in building bridge spans. American steelworkers are now in China training Chinese workers. The high speed trains in China have yet to run long enough to know if they are safe. China is governed by a central government with no oversight. Tongs still exist in all regions; bribery still exists in all regions. We should not be looking to China as an example of modern infrastructure, safety, or central planning.
"Corporations have tapped the markets for trillions of dollars in recent years, yet they plowed relatively little of the money into new operations."
So where did the money go? Share buy-backs to pump up the holdings of executives perhaps? Certainly it hasn't been spent on expanding employment or building up the skills of the workers through training programs. How much was spent on overseas operations to employ foreign workers at wages a fraction of what might be paid here? I only wish the author addressed the question of where these trillions were spent.
Back during the 2012 election Republican candidates and pundits said that investment would turn upward if Mitt Romney were elected. Comments like those led me to believe corporate elites were engaged in a "capital strike," holding back on investment to suppress economic growth that might benefit President Obama while waiting in vain for a Republican to win the Oval Office. Now four years later, it appears that our capitalists are still on strike. Will they keep holding out on the American economy and the American people during what seems likely to be another Democratic Administration?
So where did the money go? Share buy-backs to pump up the holdings of executives perhaps? Certainly it hasn't been spent on expanding employment or building up the skills of the workers through training programs. How much was spent on overseas operations to employ foreign workers at wages a fraction of what might be paid here? I only wish the author addressed the question of where these trillions were spent.
Back during the 2012 election Republican candidates and pundits said that investment would turn upward if Mitt Romney were elected. Comments like those led me to believe corporate elites were engaged in a "capital strike," holding back on investment to suppress economic growth that might benefit President Obama while waiting in vain for a Republican to win the Oval Office. Now four years later, it appears that our capitalists are still on strike. Will they keep holding out on the American economy and the American people during what seems likely to be another Democratic Administration?
3
In today's world, no one wants to spend money repair things they already own; they want bright, new shiny things instead. This is as true for individuals as for governments.
Insurance companies have had to limit claims for wind/hail damage to roofs as most people didn't want to spend the money for a new roof (heck, I could take a vacation!) and then prayed for hail so the insurance company would pay for it. Leased cars come back never even having had the oil changed in three years.
It is truly a disposable society and we're not seeing what it will cost to either repair or build new infrastructure. Unlike that house that needs tons of work and we just sell and pass on that problem to the next owner, we can't just sell the country and move on.
Insurance companies have had to limit claims for wind/hail damage to roofs as most people didn't want to spend the money for a new roof (heck, I could take a vacation!) and then prayed for hail so the insurance company would pay for it. Leased cars come back never even having had the oil changed in three years.
It is truly a disposable society and we're not seeing what it will cost to either repair or build new infrastructure. Unlike that house that needs tons of work and we just sell and pass on that problem to the next owner, we can't just sell the country and move on.
4
That depends. Aren't we selling toll roads to foreign investors, with profits going to those investors? Toll roads used to pay for road repair. Then that was corrupted, e.g. Connecticut (where I lived for 30 years). Bridges were allowed to fall down and roads became dangerous. Will foreign owned roadways be any better? I doubt it. There used to be something known as a social contract; the government owed its citizens certain basics: safety, clean air and water, etc. That contract went out to bid, and we now have gerrymandered State governments, and a gerrymandered Federal government. This will not end well for either ordinary citizens or the corrupted State and Federal governments. If we decline on all levels other than military power, we slide towards third world status, slowly.
Exactly what opportunity has been "missed?" For those of us who struggled through the double-digit interest rate era of the late '70s and 1980's, money is still ultra-cheap, and it isn't going away any time soon. Everyone has been on mental vacation, in one way or another. Three more years, minimum, until the shock of 2008 has faded away, and I dare say we'll be spinning the same yarns for the young that our parents and grand-parents spun for us about the Great Depression.
In the meantime, the seemingly unstoppable waste, fraud and abuse will continue to haunt us and our tax systems, even as we fret over the side-show of gun control, unwilling to accept the facts of life.
In the meantime, the seemingly unstoppable waste, fraud and abuse will continue to haunt us and our tax systems, even as we fret over the side-show of gun control, unwilling to accept the facts of life.
3
Thank you, Mr. Eavis. Well done.
Crumbling bridges? Lousey roads?? This matters not to Wall Street. When "Public Investment" falls to lows "not seen since the 1940's" - this speaks VOLUMES about the motivations and ethics of Corporate America.
All across our Nation, major highway systems and bridges are breaking down, to the point where cars and their drivers have the nightmare of literally falling into a river. Who is next?
When I look at the going price for a "nice" condo in NYC, with views of Central Park .... a major CEO, or "Foreign Buyer" can plunk down $30 to 55 Million in a heartbeat for their new digs - but, how about investing to make the roads and bridges safe, so that your employees can get to work?
Greed has become the common currency of America.
Take the money - and run.
Crumbling bridges? Lousey roads?? This matters not to Wall Street. When "Public Investment" falls to lows "not seen since the 1940's" - this speaks VOLUMES about the motivations and ethics of Corporate America.
All across our Nation, major highway systems and bridges are breaking down, to the point where cars and their drivers have the nightmare of literally falling into a river. Who is next?
When I look at the going price for a "nice" condo in NYC, with views of Central Park .... a major CEO, or "Foreign Buyer" can plunk down $30 to 55 Million in a heartbeat for their new digs - but, how about investing to make the roads and bridges safe, so that your employees can get to work?
Greed has become the common currency of America.
Take the money - and run.
6
A lot of this is simply the way the US economy operates. If I invest in the US I have to pay 35% corporate tax rates and I have to pay this huge regulatory cost. If I invest overseas the tax rate is much lower and the compliance cost is lower. I have seen several companies in m field pass on US investments and make those same investments overseas. Simple economics, I think.
You just stated why the entire monetary and commercial systems of the world need to be destroyed forever.
You are eventually going to pay high corporate tax rates in The Netherlands and in Luxembourg. The world where your search for untaxed profits is shrinking. And, the corporate tax rate is so subverted by loopholes and lack of enforcement, it doesn't apply. Simple economics driven by a corrupted Congress, I think.
The necessary infrastructure (stimulus) spending would have brought us quickly out of the recession. The banks and corporations got their Tarp stimulus, and then they had their goons in congress stop any stimulus for the middle class. This unnecessary recession has caused much suffering in America. The goons screamed deficit rather than jobs. I don't want to speculate here on the GOP insanity, but do I dare to use the word "evil?"
2
The failure of our country to set domestic goals and to act to reach those goals is not, in reality, about money.
What is the reality I speak of? It is comprised of real physical goods and services and real physical actions, or work, of human beings. We have plenty of stuff and we have plenty of people. We have the means to teach and train those of us who may presently lack the skills we need.
If we allow our superstitious need to try to balance the federal budget to prevent us from utilizing our resources to improve our infrastructure, we fail, not for lack of money, but for lack of inspiration.
What is the reality I speak of? It is comprised of real physical goods and services and real physical actions, or work, of human beings. We have plenty of stuff and we have plenty of people. We have the means to teach and train those of us who may presently lack the skills we need.
If we allow our superstitious need to try to balance the federal budget to prevent us from utilizing our resources to improve our infrastructure, we fail, not for lack of money, but for lack of inspiration.
2
This article should have addressed the amount of capital used for stock buy backs which has inflated the stock market and enriched executive compensation plans.
The only notable physical capital investment I can think of is Comcast building its new Headquarters in Philadelphia (the tallest building in the city now!) but then I have their service and they refuse to replace the 30 year old coaxial cable that is cracked and causes my internet service to work intermittently in the rain....
The only notable physical capital investment I can think of is Comcast building its new Headquarters in Philadelphia (the tallest building in the city now!) but then I have their service and they refuse to replace the 30 year old coaxial cable that is cracked and causes my internet service to work intermittently in the rain....
1
A "missed opportunity"? We should be so lucky.
Dozens? Scores? Actually, too many to count. Losses that still slowly roll away like rings from a pebble pitched into a pond, ring after ring receding into the distance; forever.
Who is responsible? Conservative Republican politicians elected and reelected in 2010 and 2012 determined to nullify the 2008 general election whose loss they never accepted.
They began their counterrevolution by rewriting history, insisting Conservatism bore no responsibility for the 2008 Financial Meltdown that caused their fall from grace; although clearly it did. Then, they changed tack by launching a sustained orchestrated propaganda campaign against the new president in partisan mass media -- Fox News and conservative Talk Radio especially -- that continues to this day. They demonize Obama, impugn his integrity, deny his authority. Some even insist he isn't legitimately president -- Donald J. Trump for one -- by claiming he isn't a citizen. Behind this smokescreen they sabotage government itself, obstruct its inner workings at every turn while blaming Obama's "inability to lead".
Their goal in pursuing such self-destructive destructiveness was to "take our country back", by making him a one-term president. Countless opportunities deliberately sacrificed on that xenophobic altar to advance a partisan agenda that failed in 2012. Now, with our nation still wounded and adrift and Trump -- who many of them loath -- ascendant, we are marooned here.
Dozens? Scores? Actually, too many to count. Losses that still slowly roll away like rings from a pebble pitched into a pond, ring after ring receding into the distance; forever.
Who is responsible? Conservative Republican politicians elected and reelected in 2010 and 2012 determined to nullify the 2008 general election whose loss they never accepted.
They began their counterrevolution by rewriting history, insisting Conservatism bore no responsibility for the 2008 Financial Meltdown that caused their fall from grace; although clearly it did. Then, they changed tack by launching a sustained orchestrated propaganda campaign against the new president in partisan mass media -- Fox News and conservative Talk Radio especially -- that continues to this day. They demonize Obama, impugn his integrity, deny his authority. Some even insist he isn't legitimately president -- Donald J. Trump for one -- by claiming he isn't a citizen. Behind this smokescreen they sabotage government itself, obstruct its inner workings at every turn while blaming Obama's "inability to lead".
Their goal in pursuing such self-destructive destructiveness was to "take our country back", by making him a one-term president. Countless opportunities deliberately sacrificed on that xenophobic altar to advance a partisan agenda that failed in 2012. Now, with our nation still wounded and adrift and Trump -- who many of them loath -- ascendant, we are marooned here.
3
It doesn't seem that the money spent on maintenance and improvement of existing infrastructure is ever acknowledged. I'm sure a billion dollars was spent elsewhere like painting, resurfacing roads all the mundane things which make up a city. Granted a billion dollars ain't what it used to be but if we talking about replacing let's say the Skyway instead of a relatively small railroad bridge where even low interest rates would be much of a help. Then once built where does money come from to maintain it?
Then there's the biggest problem convincing the rest of America large metropolitan areas should get the majority of infrastructure revenues when they build with such inflated prices.
Then there's the biggest problem convincing the rest of America large metropolitan areas should get the majority of infrastructure revenues when they build with such inflated prices.
2
This is the great Republican legacy of the last 40 years. Perfect example is the CEO Martin Franklin of Jarden Corporation that agreed to be bought by Newell Rubbermaid. Franklin has only been CEO of Jarden since 2014 and will be paid over $120 million when the deal is completed!! That much money to one person for being on the job for one year and all he had to do was sell the company.
It has been obvious that the low interest rates of the past 8 years has basically only benefited financial engineers in the hedge fund, private equity, and quant trading. The M&A activity on Wall Street, such as Pfizer & Allergen merger will reap $millions for bankers and CEOs but do nothing to advance research in cures for diseases. This is how the rich get even richer.
Meanwhile, retirees who lived off the income from savings, CDs and bonds have been devastated by low interest rates, resulting in spending their savings down or being forced into risky investments to maintain income. And for the average American with over $15,000 in credit card debt, interest rates on most credit cards remain over 20% - no relief here for middle America.
In the meantime the Republicans promise us that lowering taxes on the rich and corporations will create jobs and save the middle class. Well we tried that for the past 30+ years since Reagan and the plight of the middle class and poor gets even worse.
It has been obvious that the low interest rates of the past 8 years has basically only benefited financial engineers in the hedge fund, private equity, and quant trading. The M&A activity on Wall Street, such as Pfizer & Allergen merger will reap $millions for bankers and CEOs but do nothing to advance research in cures for diseases. This is how the rich get even richer.
Meanwhile, retirees who lived off the income from savings, CDs and bonds have been devastated by low interest rates, resulting in spending their savings down or being forced into risky investments to maintain income. And for the average American with over $15,000 in credit card debt, interest rates on most credit cards remain over 20% - no relief here for middle America.
In the meantime the Republicans promise us that lowering taxes on the rich and corporations will create jobs and save the middle class. Well we tried that for the past 30+ years since Reagan and the plight of the middle class and poor gets even worse.
10
This is what happens when you have a government that focuses on cutting taxes for the wealthy and allowing corporations to continue siphoning resources from our country and hording all the profits the few, while the many continue to see their dollars shrink in value. Super low interests have actually hurt the average person. People who lack the capital to invest see absolutely no return on savings, while the credit cards often employed to keep the middle class afloat carry insane interest rates, even when you have good credit.
Anyone who has even a cursory knowledge of 20th century history knows the boon that infrastructure investment was to the economy. Ironically, it was the building of these roads, highways, and bridges that connected cities and fostered the meteoric rise of the mega corporations who are now draining our economy dry. This attitude by congress that the taxpayers should pay more than big business to repair and rebuild failing infrastructure is ridiculous. The Cross Bronx expressway and the GW bridge for example are parking lots more often then not because of big 18 wheel tractor trailers schlepping goods for businesses not the average driver.
Anyone who has even a cursory knowledge of 20th century history knows the boon that infrastructure investment was to the economy. Ironically, it was the building of these roads, highways, and bridges that connected cities and fostered the meteoric rise of the mega corporations who are now draining our economy dry. This attitude by congress that the taxpayers should pay more than big business to repair and rebuild failing infrastructure is ridiculous. The Cross Bronx expressway and the GW bridge for example are parking lots more often then not because of big 18 wheel tractor trailers schlepping goods for businesses not the average driver.
5
Learn how to live off CCs, BK all the debt, wash rinse and repeat. Nothing like stuffing the bankers of the world....
Trillions at extremely low interest rates for corporations. The rest of us can fall into the Hackensack when the bridge fails.
2
I think most Americans rather spend their money on fancy cars their neighbors can't afford than give it to Uncle Sam for the repair of roads and bridges.
1
Maybe so until one day, what the heck happened to my road??? have you seen the condition of the roads in my town.... Until it comes home to hit you in the face no one cares
1
But I thought the free market system was perfect and would function to ensure that money flows exactly to where it is most needed and where it will do the most good. Hmmm. It would appear that the system still relies on wise and good people setting priorities.
4
There has never been a "free market". Markets have always been owned by those who own the means of production. Biggest capitalist propaganda myth ever.
we went through a time of a huge bull marker, and state and federal revenues were high -- and governments failed to do anything to counter aging infrasructure. Now we have just left a time where revenues were lower, but money was the cheapest it will ever be -- and again, with very few exceptions, there was no great effort to remedy what is definitely a public issue. Our politicians have bee shortsighted and obsessed with the created demon of foreign threats,while ignoring what is in front of us.
Republicans assert that the infrastructure needs are overstated and that the private sector, rather than the taxpayer, needs to play a much greater role.
I guess if you fly from place to place in your corporate Spenser's jet you could easily miss the crumbling infrastructure.
And what does the second part mean? That companies are supposed to take over roads and turn them into toll roads to recoup their investment. Wow, that would be popular. Can't go on vacation because the tolls kill the budget.
And the money invested in infrastructure largel goes to private companies. How stupid are they? Road and bridge building is rarely handled by state highway departments and even then the raw material, stone, cement, blacktop, machinery comes from the private sector.
Republicans sound more like dumb and dumber every day as they struggle to make their convoluted ideology fit the real world.
I guess if you fly from place to place in your corporate Spenser's jet you could easily miss the crumbling infrastructure.
And what does the second part mean? That companies are supposed to take over roads and turn them into toll roads to recoup their investment. Wow, that would be popular. Can't go on vacation because the tolls kill the budget.
And the money invested in infrastructure largel goes to private companies. How stupid are they? Road and bridge building is rarely handled by state highway departments and even then the raw material, stone, cement, blacktop, machinery comes from the private sector.
Republicans sound more like dumb and dumber every day as they struggle to make their convoluted ideology fit the real world.
2
The private sector will never willingly invest in roads or any other infrastructure all it cares about is "profit" for the shareholder .
1
This is the fault of the Republican controlled House and now Senate which refused to borrow the money necessary to do these projects at the currently ultralow interest rates. It isn't too late yet, as rates are still very low and if the voters turn these dummies out, there's still a chance to do good things for our infrastructure and improve the economy at the same time. No businessman would not recognize a chance to get capital money at rock bottom cost.
Tell us, what happened to the $900 billion that Obama and the Democrat Congress passed in 2009 to fund all those "shovel ready jobs'? That money was meant for infrastructure construction projects. Instead the vast majority of it went to prop up state civil service workers, unions, and teacher jobs. And the American taxpayer, who were being laid off left and right, funded it all with their taxes.
2
As always, everyone wants a slice of that fat, federal spending. Now, it's the contractors who want to fleece us, turning one billion dollar projects into two billion dollar projects, even with falling commodity prices, but without paying higher wages... it's a tough job, but someone's gotta do it.
2
It's hard to see how a national transportation disaster can be avoided on the Northeast Corridor involving the failure/incapacitation of one or both trans-Hudson tunnels long before any new tunnel is in place - at least 20-25 years from now.
What is Plan B? Is anyone working on one?
What is Plan B? Is anyone working on one?
1
The lack of infrastructure repair is coming back to bite us because we over built during the great depression we had a surplus to grow into. Now we're facing a deficiency in both basic repairs and room to grow.
This isn't hard to rectify but we need to get Republicans to agree that the basic tenets of KeynesIan economics make sense. Until then we'll be left to wonder when the next bridge collapses or why we lag behind development outside of the coastal regions who fund some of their projects.
This isn't hard to rectify but we need to get Republicans to agree that the basic tenets of KeynesIan economics make sense. Until then we'll be left to wonder when the next bridge collapses or why we lag behind development outside of the coastal regions who fund some of their projects.
Industries, especially the big businesses, will want you to think that an interest rate increase of less than one percent is a huge factor in doing such business. But, the bigger problems in industry, education, health, etc. are related to what percentage of each dollar actually goes to the work being done (e.g. the laborer, engineer, the teacher, the nurse). As businesses grow, the peripherals grow comparatively faster: human resources department, upper management, legal department, cost and finance, etc. what we as a society need to do is bring down those costs - instead of labor cutbacks, have HR cutbacks, lawyer cutbacks, etc. Also, there are so many unnecessary VPs in almost every company! But, they are like the "made" capos in the Mafia - their positions are untouchable/unfireable. So, streamline industries so that a higher percentage of each dollar goes to the actual work that results in progress - and that, too, will address inflation. We have an unsustainable economic system, especially when growth is the number one value, instead of sustainment.
1
Is the issue with infrastructure planning and simple maintenance really one of "Federal stimulus policies" or interest rates?
Or is it instead basically a political one where (no matter what sorts of stimulus or monies were available), a certain political mind-set: doesn't want to pay for ANY infrastructure work, decries government projects per se, touts decreasing taxes for the right ad an end-result good, and is content to watch roads, rails, bridges, and tunnels crumble without any sense of failure or embarrassment.
Europe generally does a much better job of paying for infrastructure needs, primarily for political and social, not fiscal, reasons. Citizens expect (and demand) that government keep things working, understand the social good these projects serve, and are willing to pay for them via taxes. And politicians generally know they'll be held to account for posturing, double-talk, and inaction.
Or is it instead basically a political one where (no matter what sorts of stimulus or monies were available), a certain political mind-set: doesn't want to pay for ANY infrastructure work, decries government projects per se, touts decreasing taxes for the right ad an end-result good, and is content to watch roads, rails, bridges, and tunnels crumble without any sense of failure or embarrassment.
Europe generally does a much better job of paying for infrastructure needs, primarily for political and social, not fiscal, reasons. Citizens expect (and demand) that government keep things working, understand the social good these projects serve, and are willing to pay for them via taxes. And politicians generally know they'll be held to account for posturing, double-talk, and inaction.
2
Every voting American should understand that our elected officials (of both parties) have spent trillions (!!) on failed wars and propping up corrupt middle east governments while claiming there is no money for roads, bridges, schools and other vital interests here in our own nation. If we re-elect the same folks again, we can only expect more of the same fiscal and moral irresponsibility.
9
The fact that the Federal Reserve raised the overnight rate to 0.25% hardly creates a missed opportunity now gone. If development agencies and municipalities are going to invest in the infrastructure they are going to be borrowing longer term. As of the moment that I am writing this, the US 10-year Treasury is yielding 2.26% -- still historically quite low.
3
Perhaps it's time to recognize that the government & Fed's market manipulations rarely work as envisioned and often have unintended consequences. The Fed's ZIRP and QE have distorted capital markets. Who knows what the future holds as a result of the government's intrusions in the economy.
And this new rate is a high rate? Seems very low to me... but headline can sell papers I guess.
4
Basic consumer economics: buy low and sell high. When money is cheap (when interest rates are low) you should "buy" money, meaning borrow. When money is expensive (when interest rates are high) you should "sell" money, meaning lend, or at least not borrow.
Interest rates were next to nothing for almost the entire Obama administration. We should have been "buying money" by the truckload, to invest in infrastructure from high-speed rail to high-speed internet.
But we are so pathologically afraid of adding to our national debt that we couldn't get ourselves to do what any Economics 101 student knows we should have done.
A good part of the blame goes to George Bush, who wasted the budget surpluses he inherited on tax cuts for the wealthy and wasteful wars. When Bill Clinton was president, Republicans insisted that the surplus had to be used to pay down the national debt. Had Republicans not flip-flopped for Bush, our national debt would have been gone and we would have been well situated to incur new debt during what turned out to be the longest period of cheap money in American history.
And we wouldn't be saddled with outdated and crumbling infrastructure.
politicsbyeccehomo.wordpress.com
Interest rates were next to nothing for almost the entire Obama administration. We should have been "buying money" by the truckload, to invest in infrastructure from high-speed rail to high-speed internet.
But we are so pathologically afraid of adding to our national debt that we couldn't get ourselves to do what any Economics 101 student knows we should have done.
A good part of the blame goes to George Bush, who wasted the budget surpluses he inherited on tax cuts for the wealthy and wasteful wars. When Bill Clinton was president, Republicans insisted that the surplus had to be used to pay down the national debt. Had Republicans not flip-flopped for Bush, our national debt would have been gone and we would have been well situated to incur new debt during what turned out to be the longest period of cheap money in American history.
And we wouldn't be saddled with outdated and crumbling infrastructure.
politicsbyeccehomo.wordpress.com
7
Our public infrastructure; highways, water and waste treatment, schools and hospitals, airports and other public use facilities have been largely ignored for since the late 1980s. Ironically these very facilities are critical to our economic growth and in the case of highways and airports have specific taxes created to fund construction and maintenance.
We live in a time when the scarcity mentality prevails, I must get my share before anyone else because there is not enough to go around. In fact, if we do not invest in the public infrastructure the economy will suffer and there may not be enough to go round.
Many American taxpayers are angry with paying the bill and seeing little if any improvement in government operations including repair and replacement of our crumbling infrastructure.
Increasing user fees/taxes and imposing new fees is cited as a solution. In today’s environment I suspect there is little public support for such an approach.
Since many are angry at the federal government but feel powerless to change as exemplified by Donald Trump’s campaign success. Let us move all functions but those specified in the United States Constitution back to the states. Eliminate the federal income and corporate taxes with the exception of is required to support Constitutionally mandated functions.
Then the states and their electorates may choose to tax and spend to their hearts desire.
Those that choose investing will prosper those who don't will suffer!
We live in a time when the scarcity mentality prevails, I must get my share before anyone else because there is not enough to go around. In fact, if we do not invest in the public infrastructure the economy will suffer and there may not be enough to go round.
Many American taxpayers are angry with paying the bill and seeing little if any improvement in government operations including repair and replacement of our crumbling infrastructure.
Increasing user fees/taxes and imposing new fees is cited as a solution. In today’s environment I suspect there is little public support for such an approach.
Since many are angry at the federal government but feel powerless to change as exemplified by Donald Trump’s campaign success. Let us move all functions but those specified in the United States Constitution back to the states. Eliminate the federal income and corporate taxes with the exception of is required to support Constitutionally mandated functions.
Then the states and their electorates may choose to tax and spend to their hearts desire.
Those that choose investing will prosper those who don't will suffer!
1
With evidence like tepid minimum wage job growth , poor infrastructure spending and NO discernible inflation one must wonder why the FED views it correct to begin raising rates again. Is it because they have lived without their magic wand for so long they're pining to regain control of the economy ?
The fundamental problem is that we have cast aside fiscal policy and been willing to use only monetary policy as a macroeconomic tool. This is a political problem.
1
It takes a near religious faith in the "infallibility" of private markets to believe that the dynamics described in this article have helped our country, done much of anything for the public good. Can a whole economic system commit, unconsciously of course, the equivalent of what the two Princeton economists found in the increase in mortality rates for middle aged white working class citizens: slow suicide?
Repeat after me, Times readers', to keep your faith up: "only the private sector can create jobs, only the private sector can repair or build new infrastructure." Let us together erase the initials CCC, WPA, and the speech which contained the "Second Bill of Rights" from our political economy memories, which now begin in 1980. And the fact that the public debt could be run up so high in mobilizing our economy for war between 1939-1941, debt levels far higher than today, and just like the British economy after the Napoleonic Wars, 1815-1830, which had even higher public debt levels, economic life went on, thrived even. So much for Republican Right and Democratic Centrist economic laws concerning public debt levels. Austerity is good for us all, have another serving or two.
Repeat after me, Times readers', to keep your faith up: "only the private sector can create jobs, only the private sector can repair or build new infrastructure." Let us together erase the initials CCC, WPA, and the speech which contained the "Second Bill of Rights" from our political economy memories, which now begin in 1980. And the fact that the public debt could be run up so high in mobilizing our economy for war between 1939-1941, debt levels far higher than today, and just like the British economy after the Napoleonic Wars, 1815-1830, which had even higher public debt levels, economic life went on, thrived even. So much for Republican Right and Democratic Centrist economic laws concerning public debt levels. Austerity is good for us all, have another serving or two.
1
As I recall Keynesian economics relied on a balance between supply and demand. We now have the supply part, boosted by low wages and technology. We do not have the demand part which requires disposable income beyond existence levels. When the demand part domestic and global shrinks enough, even our plutocrats will be scraping around for markets and income. If they find none, they will have to lock the gates to their communities and hope for the best.
This article overlooks the fact that increasing the Fed rate will help keep wages low, thus reducing costs for the job creators who create and build our nation's infrastructure. Freedom!!!
So far, they haven't invested in infrastructure. They have supported private, for profit investment in toll roads. Freedom!!
Only those that do not have any money, or financial assets, want cheap money. The debtor class, like the Federal government, want cheap money, for otherwise their interest bill would sink the economy. Think about it, if the Fed Funds rate goes up 100 basis points, the interest cost will explode to the size of the defense budget. Hard time are coming.
1
Yeah, we should just go back to gravel roads, that'll save a buck in construction, and then two more in maintenance!
I mean, that's how it is back in the heartland, should be good enough for those uppity urban elites too.
I mean, that's how it is back in the heartland, should be good enough for those uppity urban elites too.
1
If our ultra-conservative, absentee governor would only see the bucket of gold that awaits all these projects.... that the already taxed to the limit-money just cannot be found to even start... by legalizing and taxing Cannabis.
so how about it gov?
so how about it gov?
1
The failed opportunity to finance state and other infrastructure projects during the last ten years was not a failure of the fed policy of ultra-cheap money. It was legislative inaction and partisan politics. In Pennsylvania, for instance, the Dept. of Transportation regularly made well known the bridges, Interstate roadways and other infrastructure projects that desperately needed attention but was always deflected by both Republican an Democratic administrations. The Rendell Democratic administration was particularly egregious looking for ways to cut personnel and equipment in order to fund shortfalls. They cut the most experienced managers and engineers and sold off equipment that to the inexperienced looked like they may be idle too often. They also placed their own party cronies into positions that required experienced personnel causing further damage. In one particularly severe ice storm thousands of motorists were stranded for hours or days on Interstates I 80 and I 81 because of lack of experience and too little equipment.
The problems were not "deeper problems of the economy." The problem and primary reasons for not using ultra-cheap money was partisan politics, party ideology and rampant cronyism. It was also criminal short-sightedness and gross negligence.
There is still plenty of cheap money. There are also legislatures and governors who want to show how smart they are by not spending money or raising taxes despite failing infrastructure.
The problems were not "deeper problems of the economy." The problem and primary reasons for not using ultra-cheap money was partisan politics, party ideology and rampant cronyism. It was also criminal short-sightedness and gross negligence.
There is still plenty of cheap money. There are also legislatures and governors who want to show how smart they are by not spending money or raising taxes despite failing infrastructure.
26
This country has become so scared of infrastructure undertaking because doing so would almost certainly require federal government taking on a substantial amount of the financial responsibility, and when that happens, GOP would cry afoul of the White House picking winners and losers. Look at how much derision Obama got when he rescued Detroit. Instead, everyone is delusional in thinking that by providing cheap money to the market, private sectors will come to the rescue, including infrastructure. Sorry to break the news, but it's not gonna happen that way.
1
Keep in mind that with high 'economic efficiency' less workers at lower wages would be producing more and more services and products. There are other issues involved, like to where and to whom the money goes.
2
When I was growing up in the '50s and '60s, tax rates for the wealthy were 90%, and the interest rate on savings was 10%.
In order for corporations to reduce their taxes, the best option was to reinvest in their company -- which they did. That reinvestment meant jobs for the middle-class hierarchy below. In turn, those middle-class workers often had safe pension plans and were also able to see a 10-percent return on their savings. They were able to buy a house -- even with high-interest mortgage rates relative to today -- live in it until retirement (what's that?) and sell it at a reasonable profit after 30 years.
Back then, banks were not stock-market speculators, and corporations were not people. Those people who were wealthy, say the ones making $1M, paid 90% in taxes and kept $100,000 -- a tidy sum on which they could live very well.
The middle class thrived. The economy grew. Everyone profited. Not so today.
In order for corporations to reduce their taxes, the best option was to reinvest in their company -- which they did. That reinvestment meant jobs for the middle-class hierarchy below. In turn, those middle-class workers often had safe pension plans and were also able to see a 10-percent return on their savings. They were able to buy a house -- even with high-interest mortgage rates relative to today -- live in it until retirement (what's that?) and sell it at a reasonable profit after 30 years.
Back then, banks were not stock-market speculators, and corporations were not people. Those people who were wealthy, say the ones making $1M, paid 90% in taxes and kept $100,000 -- a tidy sum on which they could live very well.
The middle class thrived. The economy grew. Everyone profited. Not so today.
10
You actually think that it is fair and just the the federal government should be allowed to take $900,000 of a $1 million salary? At what income threshold would you implement this 90% income tax rate? Remember, that's the federal rate. There are still state and local (in the case of New York City) income taxes to pay. So the $100,000 remaining after the 90% federal tax is applied, is whittled down by another 7% (New York State) and another 3% (New York City). That leaves the "earner" with about $90,000 out of his original $1 million. And you still think that's fair and just?
4
Utilizing marginal tax rates and applying deductions, the individual keeps significantly more than $100,000 in this scenario.
2
The world that exists today is very different. The USA was riding high after WW2 an that's why the middle class grew so much. You can't apply the same ideas in 2015 that you could in 1945 and 1955 in any nation on the earth.
2
This was premature, weather has caused some inflation in food costs but cheap gas and oil have kept inflation at bay and will continue to for several more months at least. Job growth is good but not necessarily leading to inflation yet. The opportunity we really missed out on was paying down the public debt.
1
The opportunity we missed out on was "W" and Cheney's expensive, unfunded war in Iraq. Our Congress voted for it, based on a bunch of lies about WMD, none of which existed. We are still owing on that war. We are still fighting that war, because it created the scourge known as ISIS/ISIL. We are still allied with Saudi Arabia which funds ISIS. We are still run by oil interests; that is why we are still fighting in the ME. We are fighting to secure the oil fields in Iraq, the ones Cheney didn't get. He got his war with no oil fields.
All levels of Governments and corporations have failed to fund investment projects, involving construction, equipment and infrastructure, at super-low borrowing rates in recent years !!! Really !!! Is this a surprise ???
Since the Great Recession, all levels of Governments and corporations were driven by programs of harsh austerity to cut costs at all levels and in all areas of activity. The results of this are that there has been NO wage growth and sluggish economic growth since the Great Recession to date.
The article comments that “Public investment spending as a share of overall economic activity has fallen to lows not seen since the 1940s … business investment as a percentage of gross domestic product has remained below historical levels … (and as a consequence, the economy has) wasted opportunities of the cheap-money years.”
Many years ago I played in a pick-up football gathering of friends on Saturdays and once a year we would have a party at the end of the season. At the party we would have awards such as the “Should have award” and the “Could have award.” And there was one guy who would always win the award. During all games, he would always be saying after a failed play: “Gee, I should have … Gee, I could have …”
All levels of Governments and corporations should be awarded the “Should have award” !!!
Since the Great Recession, all levels of Governments and corporations were driven by programs of harsh austerity to cut costs at all levels and in all areas of activity. The results of this are that there has been NO wage growth and sluggish economic growth since the Great Recession to date.
The article comments that “Public investment spending as a share of overall economic activity has fallen to lows not seen since the 1940s … business investment as a percentage of gross domestic product has remained below historical levels … (and as a consequence, the economy has) wasted opportunities of the cheap-money years.”
Many years ago I played in a pick-up football gathering of friends on Saturdays and once a year we would have a party at the end of the season. At the party we would have awards such as the “Should have award” and the “Could have award.” And there was one guy who would always win the award. During all games, he would always be saying after a failed play: “Gee, I should have … Gee, I could have …”
All levels of Governments and corporations should be awarded the “Should have award” !!!
4
Do you mean that the corp's should have repatriated $ ,paid the IRS fee to do so, and reinvested the $ in building new capability in the USA instead of building factories overseas and giving obscenely high pay to the CEO's ?
2
There's still time for investment, but we won't get it while Republicans run Washington. Anything that might even hint that "government works" or that "some debt is worth the investment" will be battered and ridiculed by them.
A perfect example is the Highway Transportation fund, supported by the gasoline tax. Republicans and many Democrats howled that "there is no stomach" for a modest rise in the gasoline tax, even when prices were forecast to remain low for an extended period.
But, lo, they all agreed in the current budget deal, to allow producers to export our petroleum, in a move that is expected to increase domestic prices by 20%.
Hear this: Congress will do nothing for the American people. They are in deep thrall with their contributors, not the voters. They even schemed to have the Transportation fund bolstered by discounted corporate tax receipts from a proposed "tax holiday" on America's foremost corporate tax cheats.
They will not allow us to help ourselves with a modest tax adjustment. Not while they have an opportunity to expand their power, stay in office, and run for reelection using money gained by helping themselves.
A perfect example is the Highway Transportation fund, supported by the gasoline tax. Republicans and many Democrats howled that "there is no stomach" for a modest rise in the gasoline tax, even when prices were forecast to remain low for an extended period.
But, lo, they all agreed in the current budget deal, to allow producers to export our petroleum, in a move that is expected to increase domestic prices by 20%.
Hear this: Congress will do nothing for the American people. They are in deep thrall with their contributors, not the voters. They even schemed to have the Transportation fund bolstered by discounted corporate tax receipts from a proposed "tax holiday" on America's foremost corporate tax cheats.
They will not allow us to help ourselves with a modest tax adjustment. Not while they have an opportunity to expand their power, stay in office, and run for reelection using money gained by helping themselves.
5
Why would we want roads and bridges when we can give that money to the wealthy? After all, who's going to create more jobs, state and local governments spending money on infrastructure, or rich people buying art and Hamptons mansions?
10
Tell us, whatever happened to the $900 billion in stimulus money that Obama promised would be spent on "shovel ready" infrastructure jobs? Did it go to those evil rich people? Or did it really go to prop up union and teacher jobs so that Obama would secure their votes for his re-election? Hint: It's the second choice.
3
It got blocked in Congress
1
Paul, you made the same comment twice, and it's wrong both times. In the $800B ARRA package, $100 billion was designated for infrastructure. You're only off by a factor of 9. You could look up these numbers before posting. You can also look up precisely how the money was spent, and then you can comment on whether the money was wasted.
The too slow moving economy is the result of a lack of smart fiscal policy resulting from a deadlocked congress that can agree on nothing more than tax cuts which amount to more monetarism in the place of demand stimulating Keynesian fiscal labor demand stimulating fiscal spending and economic growth. Zero interest rate / tax cut policies in effect for the past decades are indeed inefficient attempts to move the economy by pushing a string. Reduced fiscal stimulus has been the result of the budget hawks' economic strategy for a very long time.
15
What has damaged investment more than the Fed's policies has been the perception that this Administration is not up to the job of building anything more substantial than a multi-columned backdrop for an Obama campaign speech.
The stimulus spending was not perceived to have worked, although it made sense to at least try. Ditto for tax cuts. Obamacare was an implementation disaster, cementing the impression that there is no competent stewardship in the White House.
Once executive competency returns to the White House, Americans will support infrastructure spending.
The stimulus spending was not perceived to have worked, although it made sense to at least try. Ditto for tax cuts. Obamacare was an implementation disaster, cementing the impression that there is no competent stewardship in the White House.
Once executive competency returns to the White House, Americans will support infrastructure spending.
7
HAHA HAHA HAHA from the GOP Congress that has done nothing for all of the Presidents term. Could you imagine if all of the stimulus went to infrastructure. If states in the South didn't turn down high speed rail funding and we were a year away from a Tampa-Orlando-Miami super express train. Our country would be very different. Put the blame where it goes the Grand Do Nothing Party
9
What feckless drivel from AACNY who blithely ignores the inconvenient facts: to wit: Governor Bridgegate Christie withdrew from a federal program that would have stimulated the rebuilding of crumbling New Jersey infrastructure in return for providing it with billions to build a new Hudson River tunnel thus relieving strain on the existing alternatives. Why did Christie withdraw? For rationale that sounds very much like AACNY - blaming others for a failure of vision and nerve on the Republican side of the tracks unless they're given power enabling them to steal the rest of us blind.
Sorry, we're not buying what you're selling AACNY - during the initial phases of money from TARP era funding we saw massive infusions that did rebuild and restore crumbling bridges in NY like the Croton Veterans Bridges and vast stretches of the Taconic and other parkways that had gone neglected for decades. Rather than nurture that the Republicans have acted as if the cheap interest was Public Enemy #1 and have been ceaselessly harping about America's 'debt crisis.' It's actually a Republican racism and integrity crisis we've all been suffering at the hands of.
AACNY misses the very gist of the point of this article - in retrospect this era of historic low interest will seem a huge missed opportunity that China took advantage of and, thanks to the Republicans, we largely missed out on.
Sorry, we're not buying what you're selling AACNY - during the initial phases of money from TARP era funding we saw massive infusions that did rebuild and restore crumbling bridges in NY like the Croton Veterans Bridges and vast stretches of the Taconic and other parkways that had gone neglected for decades. Rather than nurture that the Republicans have acted as if the cheap interest was Public Enemy #1 and have been ceaselessly harping about America's 'debt crisis.' It's actually a Republican racism and integrity crisis we've all been suffering at the hands of.
AACNY misses the very gist of the point of this article - in retrospect this era of historic low interest will seem a huge missed opportunity that China took advantage of and, thanks to the Republicans, we largely missed out on.
17
Except that the perceptions were based not on facts, but on partisanship itself. Except ;that most economists disagree with your dour non-analysis of the stimulus. And then the perceptions (including yours) were used to justify ideological positions and candidate preferences. If one starts with with facts, one might wind up somewhere else.
3
Amazing, the way The Times confuses Cause with Effect. Did it occur to Mr. Eavis that the reason the Fed kept interest rates low was BECAUSE economic activity was so subdued? Or did he neglect to read the Fed's OWN WORDS?
"Given the economic outlook, and recognizing the time it takes for policy actions to affect future economic outcomes, the Committee decided to raise the target range for the federal funds rate to 1/4 to 1/2 percent"
This article highlights what has always been the REAL DANGER in the Fed's thumb on the interest rate lever: that people (like Mr. Eavis) will come to believe that the Fed has a magic wand, that it can wave whenever it wants, and it will make unemployment go down and the stock market go up. In which case, why would anyone EVER want to raise interest rates?
"Given the economic outlook, and recognizing the time it takes for policy actions to affect future economic outcomes, the Committee decided to raise the target range for the federal funds rate to 1/4 to 1/2 percent"
This article highlights what has always been the REAL DANGER in the Fed's thumb on the interest rate lever: that people (like Mr. Eavis) will come to believe that the Fed has a magic wand, that it can wave whenever it wants, and it will make unemployment go down and the stock market go up. In which case, why would anyone EVER want to raise interest rates?
3
Connecticut Yankee - the translation of your comment is that the Feds kept interest low because governments failed to float large infrastructural bond funded improvements? Now how does that work exactly? The low interest rates of the Fed translate into low potential bond returns, which thus makes the issues harder to float? No. The states that have taken advantage of low interest have been able to used cheap interest to their historic advantage. But the point of this article is that the Republicans have continued to wage their age old war on mass transit capital expenditure and better maintenance.
What is it about the word, "mass" in ''mass-transit'' that always seems to rub Republicans, especially from the square states, the wrong way? Gee could it be the fact that the rest of us have been suckered into subsidizing their two sheep per 100miles densities for a century? As for like minded mass-transit-mean governors like Chris Christie from New Jersey, he wanted more money from New Yorkers so that he wouldn't have to actually propose a real budget to his under-taxed state of tortured commuters and ugly, ugly, highways and byways.
What is it about the word, "mass" in ''mass-transit'' that always seems to rub Republicans, especially from the square states, the wrong way? Gee could it be the fact that the rest of us have been suckered into subsidizing their two sheep per 100miles densities for a century? As for like minded mass-transit-mean governors like Chris Christie from New Jersey, he wanted more money from New Yorkers so that he wouldn't have to actually propose a real budget to his under-taxed state of tortured commuters and ugly, ugly, highways and byways.
9
I think the word [in the Fed statement] that you're missing is "outlook." The markets are forward-looking. The prospect of massive government spending [and with the government in deficit, borrowing] would have spooked the markets and driven rates up IN ADVANCE of the actual spending.
1
The failure of governments to link corporate tax cuts and artificially low interest rates to increased employment levels and capital investment by corporations is truly regrettable.
Voters were told corporate tax cuts will allow businesses to invest in people and equipment, but the reality is corporate cash holdings have swollen to record levels while most job growth improvements since 2008 are in part time service employment and many are under-employed.
I can only hope voters will finally reject Republican assertions that corporate America can be blindingly trusted to act in the best interest of the public and restore sanity in Washington come 2016 elections.
Voters were told corporate tax cuts will allow businesses to invest in people and equipment, but the reality is corporate cash holdings have swollen to record levels while most job growth improvements since 2008 are in part time service employment and many are under-employed.
I can only hope voters will finally reject Republican assertions that corporate America can be blindingly trusted to act in the best interest of the public and restore sanity in Washington come 2016 elections.
7
The lack of a Infrastructure investment bank, which could have been either a bi- partisan or a Democratic initiative is one of the major domestic failures of the Obama administration. As many have pointed out we are in decline not from forces that are without but from our own choice to fail. There is no tax give away substitute for direct spending and it is a current fantasy, mostly on the right, to think so. But true Rebuilding of America in all respects does no really to be a major message of the Democrats.
3
The failure sits with Paul Ryan who sat on any funding for infrastructure spending. Last time I looked Paul Ryan was, and remains, a star in the GOP. He will not win if nominated. That does not mean he will not continue to damage the economy. Even if the funds are released, there will be enough poison pill riders to destroy the package.
After so much money was frittered away on free welfare stuff to buy Dem votes no wonder there is not any left for things like infrastructure that benefit everyone
4
Last year an OECD survey placed the US 25th out of 34 members in social expenditures as a fraction of GDP. By that measure we should have plenty left over to build whatever we want. Unfortunately, that's simply not how it works.
1
What a joke. Low interest loans to save our crumbling roads, bridges, tunnels, water and sewage pipes, rail lines, communications channels and failing national power grid?
Coupled to the horrific time bombs of overpopulation, and their Climate Change?
Toss in the growing expense of outstanding debt, unsupported derivatives, endless warmongering, and ineffectual leadership running "zombie" bureaucracies and not even the entire human race could afford such a debt burden - let alone its meaningless interest hike.
Here is a clue. Entropy rules the universe. Probably very close to the mystical Fed inflation target rate of 2.5%. Perhaps even closer to the natural log base "e" = 2.7128. Continuously compounded deterioration.
In other words we must rebuild our infrastructure at the 2.7% target growth rate just to stand still - make zero shared profit - or civilization falls on somebody's watch.
The alternative is WWIII. Much easier for those New World Order thinkers to simply lop off the middle 2/3rds of the human capital pyramid and start building again. Or as our ancient alien neighbors might say "Good Luck".
Coupled to the horrific time bombs of overpopulation, and their Climate Change?
Toss in the growing expense of outstanding debt, unsupported derivatives, endless warmongering, and ineffectual leadership running "zombie" bureaucracies and not even the entire human race could afford such a debt burden - let alone its meaningless interest hike.
Here is a clue. Entropy rules the universe. Probably very close to the mystical Fed inflation target rate of 2.5%. Perhaps even closer to the natural log base "e" = 2.7128. Continuously compounded deterioration.
In other words we must rebuild our infrastructure at the 2.7% target growth rate just to stand still - make zero shared profit - or civilization falls on somebody's watch.
The alternative is WWIII. Much easier for those New World Order thinkers to simply lop off the middle 2/3rds of the human capital pyramid and start building again. Or as our ancient alien neighbors might say "Good Luck".
1
Thank you LXIX A2MI, for your survivalist suggestion that our 'leaders' will opt for planetary near extinction as an easier alternative than floating adequate bond infrastructure restoration bonds.
Some of us prefer the bond alternative. It also helps with aging population bombs.
Some of us prefer the bond alternative. It also helps with aging population bombs.
7
no.. the alternative is legalizing the last drug on the pharmacy shelf... Cannabis.
2
Senator Bernie Sanders introduced The Rebuild America Act which is also a part of his platform as a Presidential Candidate by building an Infrastructure Bank that would grow our economy, update our outdated infrastructure, create a huge number of jobs through both the construction/repair work and the increased demand for the raw materials and components.
We get updated infrastructure that will build our economy, we will get many new jobs, the wages and purchases will stimulate main street. Of course, the Republicans oppose it.
Here is the detail of his plan at his campaign website:
https://berniesanders.com/issues/creating-jobs-rebuilding-america/
It is not too late to fix our infrastructure or elect a President and Congress that will make it happen. Time to register to vote, people.
We get updated infrastructure that will build our economy, we will get many new jobs, the wages and purchases will stimulate main street. Of course, the Republicans oppose it.
Here is the detail of his plan at his campaign website:
https://berniesanders.com/issues/creating-jobs-rebuilding-america/
It is not too late to fix our infrastructure or elect a President and Congress that will make it happen. Time to register to vote, people.
9
We will do this. We will do that. We will do no such things unless there is a president who understands how to spend gazillions of taxpayer dollars effectively.
1
Some of us will support Bernie's bill whether it's introduced by him as senator from Vermont with President Clinton's backing from the White House. Hope you've come round to agree with Bernie that the goals are more important than the egos.
2
Yeah, yeah, AACNY - let us all know what the next war is when we wake up from our nap. The only 'gazillions of taxpayer dollars' spent 'effectively' according to the Republicans you champion are on military toys and war.
4
Once again the Republican policy of build nothing that would be part of the commons has cost us dearly. We could have built our way out of the Great Republican Recession with very cheap money but we failed to do so because that would doing what Obama wanted; and if damaging Obama politically meant damaging the nation, well that was a small price to pay, since they could claim that this was the Obama economy. Perhaps the people, when it comes time to vote, will excise this political cancer before that cancer has us goose stepping to oblivion.
31
Here's the problem that the Fed and Obama won't talk about: $18.5 trillion in federal debt, up from less than $11 trillion when Obama took office. That's more debt accumulated by one president than all previous presidents combined. The Fed has been buying U.S. debt to bankroll cheap money to keep the economy staggering along. Who will repay the debt and when? Obama will be leaving the debt he accumulated behind as he jets off into the sunset of Hawaii. But American taxpayers will be left to foot the bill.
7
Paul of White Plains -That's because the increase in debt in the early years of the Obama administration was a largely a response to the imploding economy -- just as the big bulge at the end of the George W. Bush administration (2008) was a direct reaction to world-wide disaster that Bush helped light the fuse for.
Those of us who remember who posts what comments remember that consistently weigh in negatively on Obama and his administration. But, someone needs to point out that we still have a U.S. auto industry and the largest economy in the world, which would not have been that case if Obama had not forced those issues.
As for the total debt owed, it is a meaningless figure unless considered in relation to the GDP and there the greatest villain has been continued Republican intransigence in supporting job creation and taking advantage of the cheaper energy by allowing a rebuilding of our national reserves to dampen down the spikes of future shortages down the road. The Republican Kamikaze politics of 'crash the car into the bridge and watch it burn' are our nation's biggest problem and obstacle to progress as this article makes plain.
Those of us who remember who posts what comments remember that consistently weigh in negatively on Obama and his administration. But, someone needs to point out that we still have a U.S. auto industry and the largest economy in the world, which would not have been that case if Obama had not forced those issues.
As for the total debt owed, it is a meaningless figure unless considered in relation to the GDP and there the greatest villain has been continued Republican intransigence in supporting job creation and taking advantage of the cheaper energy by allowing a rebuilding of our national reserves to dampen down the spikes of future shortages down the road. The Republican Kamikaze politics of 'crash the car into the bridge and watch it burn' are our nation's biggest problem and obstacle to progress as this article makes plain.
16
It's what happens when you deregulate the financial sector and give huge tax cuts and subsidies to the wealthiest citizens. The deficit during Obama's term has DECREASED. To shrink the debt, we could raise the top tax brackets and capital gains taxes, and reduce corporate welfare. The President wanted to do that and the GOP blocked it -- because it's much more fun bashing Obama with the debt than actually doing something to reduce it.
5
Math is wrong and ignores the GOP stand of no new taxes for anything and how much of this increase is caused by the previous 8 years of ignoring the needs of the country?
3
You mean the Portal Bridge wasn't replaced by the Stimulus Program? Darn! I thought all of our nation's infrastructure problems were fixed. What happened to all that stimulus money?
4
Guess it wasn't shovel ready.
3
Governor Bridgegate - helped scuttle mass transit programs in Joisey, strongmind of Chicago, and pulled out of the extra tunnel link that would have transformed his state into the nearly livable. The stimulus money did good things in NY and elsewhere before the hedge-funded hate class succeeded at restoring Washington DC gridlock.
9
The stimulus money was spent on infrastructure, as you well know. However, there was nowhere near enough allocated to fix "all our nation's infrastructure." Republicans blocked additional funds, to achieve their primary goal of "making Obama a one-term President." Now you're making snide cracks about the shortfall, onitting the fact that it was deliberately imposed by the GOP to benefit themselves at the expense of all Americans.
3
When it was announced at the beginning that interest rate increases were linked to low unemployment, it was inevitable that unemployment would remain high for a very long time.
2
A much needed perspective on how little Obama's stimulus package actually accomplished. What a wasted opportunity.
5
This is less a consequence of "how little Obama's stimulus package actually accomplished" and more a problem of a Republican Congress unwilling to support federal spending on public works projects as well as the greed and self serving actions of amoral corporate leaders who, as the article points out, have failed to invest in workers and improving their companies while they sit on huge amounts of cash and receive salaries that constitute the highest CEO to worker ratio of any country in the world... the highest, many times over.
3
Actually, Josh, of Grand Rapids, MI., it's a demonstration on how little such federal programs can accomplish in states with governors like Christie from NJ who sabotaged the stimulus and diverted it to his interests corruptly allocating it in lieu of taxes to falsely balance his bloated budget.
10
The elite generation, most of them baby boomers, have withheld infrastructure investment, both public and private. Their target is to maximize wealth for themselves, and anything else were ignored. Corporations borrowed money to use for M & A or for bridge-money for the dividends using off-shore cash as collateral. They have not used the debt for investment. They used all the productivity gain for the dividend payment, not a penny for the contributing workers. They bought politicians in order to lower tax payments. Voting power of the rank and file Republicans were used for this purpose. Now they are surprised that these rank and file conservatives choose Trump instead of their candidates. Large number of voters do not know the analysis by Summers or Krugman that Republicans austerity policy has damaged not only our economic growth since 2008 but also potential economic growth by so-called 'hysteresis' impact. Bernanke, former chairman of FED and also an academic expert of financial crisis, criticized Republican congress for their austerity actions. I could say that Republicans in the current generations not only have become impediments for the betterment of our lives but also for the economic progress of our country.
11
This article fails to recognize a few factors. Cheap money in 2015 does not mean cheap labor. There was a sweet spot in the time after the recession from 1qtr 2010 to 2qtr 2011 which rates were ridiculously low, credit of municipalities and even state governments was being shaken out, and labor was near rock bottom. Awarding a contract nearly anywhere in the country during this period would have resulted in most bang for buck. However, it depended if such entity requesting service had the credit or capital on hand, and a vetted biddable project ready to put on the street. The real fault of any missed opportunity, for the few cases of what could have been but was not, is that major projects were not designed and sitting in a drawer waiting for the right time. To design a bridge, a highway, tunnel, water infrastructure, these take years!
Also, Banks would not provide money to anyone at the beginning of this period. Contractors must front cash for materials and labor for 60-180 days until actually receiving payment. This forces the contractor the need to take out a loan, and as again, here we are in the bind which banks are not giving out money due to fear the contractor will go belly up.
I agree that if a bank was created for funding these projects, and it was structured to insure and fund contractors, more shovel ready projects would have been built.
Also, Banks would not provide money to anyone at the beginning of this period. Contractors must front cash for materials and labor for 60-180 days until actually receiving payment. This forces the contractor the need to take out a loan, and as again, here we are in the bind which banks are not giving out money due to fear the contractor will go belly up.
I agree that if a bank was created for funding these projects, and it was structured to insure and fund contractors, more shovel ready projects would have been built.
16
In the 1950's President Eisenhower got an important bill through - The National System of Interstate and Defense Highways. There had been plan for the interstate system since 1939 - in part because American leaders recognized the value of other countries much better transit systems. Ultimately it wasn't a popular bill with the public. Today we have a bloated Military budget - could not some of these dollars be directed to "national defense" by rebuilding our crumbling infrastructure instead of useless and obsolete fighter planes? After all since most Americans don't see the progress other countries are making our military is in a unique position (and has the perspective) to make these important changes to our infrastructure systems (rail, bridge, roads, mass transit) that would serve us every day and be ready if ever - in times of defense.
18
Any project that receives federal funds quickly becomes "bloated". Just look at the VA hospital in Arizona that suddenly cost $1 billion.
1
Why build bridges & roads, why invest even in corporate infrastructure, when you can borrow almost for nothing at one Fed window, walk around the corner & buy govt paper, then pocket the interest, a point or more, for having done bupkes … or if you're the more sporting type, say a GoldmanSachs investment banker, go for high frequency trades front running … so many wonderful ways to take cheap money & with so little sweat or risk, make a bundle. Now that's Wall St today, and if you don't like it, vote for Bernie Sanders – he'll stop those shenanigans … which is why Wall St is backing HRC.
3
"the money did not flow where some economists and analysts say it is needed to improve the long-term potential of the economy."
it wasn't supposed to!
The Fed is owned by the Banks - so it does what is good for the Banks. In this period, raise the values of Bank assets.
The Federal Government is owned by the Banks - so it does what is good for the Banks. In this case declare Bank Fraud defacto not a crime (ask Lanny Breuer & Holder-(Covington & Burling Partners...again).
Nothing is ever by chance - keep the Sheeple confused.
"Question marks" - no the citizens are the..... Marks!
it wasn't supposed to!
The Fed is owned by the Banks - so it does what is good for the Banks. In this period, raise the values of Bank assets.
The Federal Government is owned by the Banks - so it does what is good for the Banks. In this case declare Bank Fraud defacto not a crime (ask Lanny Breuer & Holder-(Covington & Burling Partners...again).
Nothing is ever by chance - keep the Sheeple confused.
"Question marks" - no the citizens are the..... Marks!
3
Parrot is correct to the extent that government lending programs to banks that do not negotiate terms have historically led to the banks and those who control them lending to their preferred interests, which tends to be opportunities seeming to present the highest immediate return. Such returns can be engineered more easily through the purchase of real property and assets that are thereby inflated by the investment itself and sold back to the market at a high return - until they crash. Banks don't invest money, they play with it and then pass it off down the line. That is what they do to make money, and arguably that is how they function in a limited role to distribute money to the society with some of the cash sticking to their fingers. This is what infuriated Andrew Jackson. But, eliminating the Fed didn't solve that problem. Witness the crash of 1837, or the panic of 1845, or 1893. Reestablishing the Fed didn't solve that problem, either, for post 1915 we had 1929. If the Fed doesn't do its job and shovel more money out there during times of Recession, we get Depression. Debt in and of itself is a meaninglessly isolated descriptive used and abused by anal-retentive nitwit mercantile misers. Expenditure that aids trade and commerce and the quality of life is not the enemy, newsflash to Republican opinionators.
12
An excellent, timely, and thought-provoking article by Mr. Eavis. Bump-him up please. Influencer material, we should get to read him more often.
1
I get that the entire finance/entertainment industry thrives on creating fake sense of urgency, anxiety, fear, and greed. But, I wish the NY Times would not succumb. All of the securities market, stocks, bonds, . . . everything, is an illusion-world held together by words, belief, and most of all greed. Can we leave hysteria to dumb TV stations (CNBC, and FOX Business), and stop acting like skittish children?
There is no missed opportunity for ultra-cheap money. No business died because the interest rate changed 1%. They died for a hundred other reasons, but not that. When interest rates go up 1%, prices shoot up 10%, and the customer believes that such change is justified. And remains scared.
Moreover, ultra-cheap money did not produce much in the way of investment in America. The government bailed out their robber friends, but did not invest in infrastructure that would have helped the next generation. Banks took free cash and sat on it; took no risk. Corporate America did not use ultra cheap money to fund risky ventures; they played with the $2-3 trillion in cash sitting in their vaults like Uncle Scrooge. Many, too many, bought back their own stock to enrich the CEOs and boards while firing people.
Yes, I know that everyone who took an econ course and is now a total expert will hysterically argue otherwise.
Get a life NYT; stop feeding the beast.
Kalidan
There is no missed opportunity for ultra-cheap money. No business died because the interest rate changed 1%. They died for a hundred other reasons, but not that. When interest rates go up 1%, prices shoot up 10%, and the customer believes that such change is justified. And remains scared.
Moreover, ultra-cheap money did not produce much in the way of investment in America. The government bailed out their robber friends, but did not invest in infrastructure that would have helped the next generation. Banks took free cash and sat on it; took no risk. Corporate America did not use ultra cheap money to fund risky ventures; they played with the $2-3 trillion in cash sitting in their vaults like Uncle Scrooge. Many, too many, bought back their own stock to enrich the CEOs and boards while firing people.
Yes, I know that everyone who took an econ course and is now a total expert will hysterically argue otherwise.
Get a life NYT; stop feeding the beast.
Kalidan
1
Kalidan - the essence of the objections you raise can be addressed by release of money by stipulating performance contracts - which is the function of a bond in reality. When we had separate competing banking under the Banking Act of 1933, the Fed was provided with greater leverage as lenders in the different sectors had to compete more for funds. Lending to savings banks, for example, would stimulate more mortgage issuance and small business loans, whereas investment banks would theoretically feed more into underwriting activity. Even under Glass-Steagall, however, the banking community and its Republican tendency to hoard managed to choke off growth and stall the Roosevelt Recovery. The great Stimulus was WWI from 1914-18 and WWII from 1938/9-1945 followed by the Cold War, 1949-1959. Somehow, when 'National Security' is at hand, 'debt becomes meaningless' to the great Republican Patriots - except to the extent that Democracy is suspended and the general population is subject to death, deprivation, and rationing. Permit those of us familiar with history to hold Republicans and self-professed 'patriots' beneath contempt, for in fact they helped create the world's problems that they jump to kill others to solve in an orgy of spending and debt known as war. Can't we all just rebuild our rail and road infrastructure and restore jobs in that sector and issue some bonds? We've suffered the death of maybe 100 U.S. civilian deaths to ISIS. Give it a break GOP.
3
What does the country need?
Well paying jobs.
If people are working, producing, and spending, we get a virtuous circle where the money they spend provides more decent jobs for other people. What do we need to provide these well paying jobs?
Well, gee, we need money, money in the private sector, money to pay for these well-paying jobs. More money must come into the private sector than goes out. Where does money flow from and to?
There are two places. First, the federal government. When it spends, it adds money to the private sector. When it taxes, it takes money out. The deficit measures how much it puts in net. When we have a surplus, we take money out net. THE FEDERAL DEFICIT IS INCOME FOR PEOPLE, BUSINESSES, AND STATE AND LOCAL GOVERNMENTS.
The other place is our trade balance. When it is positive, money is put in the private sector; when it is negative, money is taken out.
The net effect of these two sectors must be positive. If we have a large trade balance, we only need a small deficit or can even support a surplus like Germany. Today we have a large negative trade balance. We need a large deficit.
But when we get money into the Private sector, it must go to the right place. It does little good sitting in Scrooge McDuck's basement. It must go to the people who need it and will spend it. They way to do this is by deficit spending for worthwhile projects like fixing roads and bridges, grants for education, etc. Obviously this will also have long term benefits.
Well paying jobs.
If people are working, producing, and spending, we get a virtuous circle where the money they spend provides more decent jobs for other people. What do we need to provide these well paying jobs?
Well, gee, we need money, money in the private sector, money to pay for these well-paying jobs. More money must come into the private sector than goes out. Where does money flow from and to?
There are two places. First, the federal government. When it spends, it adds money to the private sector. When it taxes, it takes money out. The deficit measures how much it puts in net. When we have a surplus, we take money out net. THE FEDERAL DEFICIT IS INCOME FOR PEOPLE, BUSINESSES, AND STATE AND LOCAL GOVERNMENTS.
The other place is our trade balance. When it is positive, money is put in the private sector; when it is negative, money is taken out.
The net effect of these two sectors must be positive. If we have a large trade balance, we only need a small deficit or can even support a surplus like Germany. Today we have a large negative trade balance. We need a large deficit.
But when we get money into the Private sector, it must go to the right place. It does little good sitting in Scrooge McDuck's basement. It must go to the people who need it and will spend it. They way to do this is by deficit spending for worthwhile projects like fixing roads and bridges, grants for education, etc. Obviously this will also have long term benefits.
8
Private sector money only comes from the government and goes out via taxes? In what closed loop economy are these the only 2 mechanisms?
AACNY, I only had 1500 characters, and you missed the part about foreign trade. And since the government can print as much money as it needs, it is not a closed loop.
Yes, banks create money every time they make a loan. Many people think that the way banks work is that people deposit money and the banks lend it out, but it doesn't work that way at all.
If you want to see how they really work, here is a good article:
http://www.theguardian.com/commentisfree/2014/mar/18/truth-money-iou-ban...
Briefly the point is that banks lend out in loans many times the money they have on hand. If you borrow from bank A and use it to pay your plumber who uses bank B, then the result is a loan from Bank A to Bank B. It's an elaborate shell game. It works fine only so long as people don't want their money in liquid form like dollar bills.
As you may guess it can only handle so much debt. When the total amount of the loans gets too big, the system crashes. Thus every one of our 6 depressions was preceded by an explosion of private debt. In 2008 the FED did not want another depression so it created money and lent it to the big banks thus preventing total disaster.
In each case, the reason private debt exploded was the lack of money coming from the public sector and the foreign sector.
Yes, banks create money every time they make a loan. Many people think that the way banks work is that people deposit money and the banks lend it out, but it doesn't work that way at all.
If you want to see how they really work, here is a good article:
http://www.theguardian.com/commentisfree/2014/mar/18/truth-money-iou-ban...
Briefly the point is that banks lend out in loans many times the money they have on hand. If you borrow from bank A and use it to pay your plumber who uses bank B, then the result is a loan from Bank A to Bank B. It's an elaborate shell game. It works fine only so long as people don't want their money in liquid form like dollar bills.
As you may guess it can only handle so much debt. When the total amount of the loans gets too big, the system crashes. Thus every one of our 6 depressions was preceded by an explosion of private debt. In 2008 the FED did not want another depression so it created money and lent it to the big banks thus preventing total disaster.
In each case, the reason private debt exploded was the lack of money coming from the public sector and the foreign sector.
2
"Job Creators" was a buzz term during the 2012 election. I am told it referred to those wealthy folk who couldn't bear any more of a tax burden. Are they still waiting for a Republican POTUS so they can put some of those trillions of spare cash into creating new jobs?
5
After 7 years, it was hard to see the low interest rates as anything extraordinary. Therefore there was no pressure to act. It is likely that the slight increase in rates will be a call to action that will actually spur investment rather than defer investment.
6
During this era of low almost free money, corporations borrowed money to line the pockets of their executives and their shareholders at the expense of their employees and perhaps even their long-term viability. Not using the free money for infrastructure and research projects, ie investing in the future will come back to haunt us in the next downturn as our foundation continues to crumble while we chase the quick cosmetic gain.
6
I find it absolutely amazing that the New York Times thinks that one of the most important effects of raising the target fed funds rate by 0.025 that needs to be reported to the public is that it will be harder for the government to borrow more money! This confirms what I already new, I live in an alternative universe from the New York Times.
1
Major infrastructure reinvestment is coming just over the horizon, whether you see it today or not.
The choice is to initiate it while it's cheap and smart to do it, now, or to wait and overpay like the stupid, shortsighted chumps we are.
The choice is to initiate it while it's cheap and smart to do it, now, or to wait and overpay like the stupid, shortsighted chumps we are.
1
I totally agree we need infrastructure improvement. But I also know, from first-hand evidence, we do not need cheaper or more capital to do this.
I travel all over the world, and almost as a hobby begin taking pictures of road, bridge, and building construction in many different countries. 30+ years.
I started videoing them years ago and use them to illustrate efficient and inefficient processes (like comparing Toyota to GM).
It is very easy to compute that the US wastes at least 30% of the money it spends on "infrastructure" (roads, etc) compared to Europe, Japan, and even Africa.
Example. I drive past a single minor bridge that has been "under repair" for more than 2.5 years, 15 times per month. There are two $37 million cranes that sit there, unused, about 200-300 days per year. The bridge is still not finished.
One day in the middle of an uninhabited road in Utah, I videoed more than 8 miles of those massive new traffic "cones" (many made in China), 4-6 deep across the road - with zero pedestrians around, and perhaps 4 cars per mile density.
This led me to record these around the country. The cost is in the hundreds of millions of dollars - just for cones that sit doing nothing.
These are but thousands of examples.
We need more repairs. Europe/Japan has much better maintenance.
But if we plan and execute our existing processes better, we can do more repairs, cut the massive energy waste in stalled traffic, and provide better benefits to the poor.
I travel all over the world, and almost as a hobby begin taking pictures of road, bridge, and building construction in many different countries. 30+ years.
I started videoing them years ago and use them to illustrate efficient and inefficient processes (like comparing Toyota to GM).
It is very easy to compute that the US wastes at least 30% of the money it spends on "infrastructure" (roads, etc) compared to Europe, Japan, and even Africa.
Example. I drive past a single minor bridge that has been "under repair" for more than 2.5 years, 15 times per month. There are two $37 million cranes that sit there, unused, about 200-300 days per year. The bridge is still not finished.
One day in the middle of an uninhabited road in Utah, I videoed more than 8 miles of those massive new traffic "cones" (many made in China), 4-6 deep across the road - with zero pedestrians around, and perhaps 4 cars per mile density.
This led me to record these around the country. The cost is in the hundreds of millions of dollars - just for cones that sit doing nothing.
These are but thousands of examples.
We need more repairs. Europe/Japan has much better maintenance.
But if we plan and execute our existing processes better, we can do more repairs, cut the massive energy waste in stalled traffic, and provide better benefits to the poor.
1
Now you point this out? We've got D grade roads and bridges all over this country and we've heard 7 years of whining about when are rates going to go up again from the savers, and hardly a peep about investing in bridges while investing was cheap.
5
Anyone who expected differently does not understand human nature. The last 15 years have been the equivalent of giving a 12-year-old a hundred dollar bill and expecting a wise investment.
2
Central planning always leads to gross misallocation of resources, no matter the intelligence level or academic pedigree of the central planners. Central planning didn't work out so well in the former Soviet Union, and it isn't working these days in China either (where massive infrastructure spending did occur). Why was it going to work out better here in the U.S.?
3
Because it worked for 200 years before that. You can try to stigmatize public works and infrastructure with your veiled association to communism but the fact is, it worked in general and overall. That is until we got handed a sh!t sandwich in 2008 from Bush and then an obstructionist do nothing Congress courtesy of the Party of No wasted another decade of doing nothing other than spending money on wars.
6
"Central planning always leads to gross misallocation of resources..."
That statement is dogma, not fact. The use of "always" with a single example is a dead giveaway. The USSR is only an example of terrible central planning, not proof that central planning is always bad.
In fact, isn't "central planning" how most large companies operate? It''s the quality of the planning that matters, regardless of whether it is "central" or diffuse. Poor planning is based on poor assumptions, and is incapable of self-correction or adjustment to change. Good planning is realistic and flexible.
Our interstate system is a result of "central planning" as was the Tennessee Valley Authority.
That statement is dogma, not fact. The use of "always" with a single example is a dead giveaway. The USSR is only an example of terrible central planning, not proof that central planning is always bad.
In fact, isn't "central planning" how most large companies operate? It''s the quality of the planning that matters, regardless of whether it is "central" or diffuse. Poor planning is based on poor assumptions, and is incapable of self-correction or adjustment to change. Good planning is realistic and flexible.
Our interstate system is a result of "central planning" as was the Tennessee Valley Authority.
6
How on earth is infrastructure spending "central planning"? Someone has to build the bridges, airports, and dams, while keeping the roads and railways safe and up to date. Who but the government?
2
When I read about infrastructure projects thst remain undone and the problems a raise in the Fed Rate of 1/4 of a %, I want to scream. Paul Ryan has just pushed through a "budget" containing billions in tax breaks for corporations and billionaires, pushing the country even further in debt...not for roads and bridges but so billionaires could buy another Gulf Stream. Republicans don't want to invest in this country. Never have. They want to make sure their owners can make a quick buck at tax payers expense. Infrastructure improvements...tell us how we will pay for them. Tax breaks for the wealthy and corporations....they don't care. Billions for foreign wars..no problem. Fixing our roads and bridges no sir. It has nothing to do with the fed! It has to do with priorities and ours are completely out of whack!
31
Then why don't local jurisdictions take on the problem since it affects them the most. Must everyone depend on the feds to supply money for everything?
You forgot to mention how it also made Al Gore rich.
4
You seem to be mixed up. Al Gore got rich by investing in new technology, not by refusing to do so. I have no doubt that you have your reasons for singling out Mr. Gore, but a fact not mentioned in the article is that a lot of people got rich in the years of low interest rates. Examples include, such persons as corporate executives who were given raises, bonuses, stock options, and perks by compliant boards of directors for doing nothing more than borrowing money at low interest rates and buying back massive quantities of outstanding shares of stock.
2
This piece is spot-on and brilliant. I suggest that Mr. Eavis should go into politics and try to actually effect some of these ideas. The lack of leadership and lack of understanding by our elected officials is the reason why our society is going backwards. Building and improving the infrastructure necessary for transportation, and even some aspects of energy, housing, water, sewage, food and business success offers jobs, quality of life, fairness, and a sustainable ecological future. These are fundamentals for why we have government and economic systems.
31
Unfortunately, there are very few states in the USA where someone as intelligent and clear-thinking as Mr. Eavis could be elected.
Sadly, the leaders are doing what is politically possible.
The root of this madness is one layer deeper, campaign finance.
The root of this madness is one layer deeper, campaign finance.
Again we can thank the Republicans for nothing!
9
So exactly what did Reid and Pelosi accomplish? And what happened to those shovel ready projects? It's impossible for you Dems to take responsibility for anything.
2
The missed opportunity to use "cheap" money to rebuild the nation's literally crumbling infrastructure comes down to one simple fact: Mitch McConnell's desire to ensure that Barack Obama's presidency failed.
Making much-needed investments in the country's infrastructure would have resulted in putting people back to work at relatively well-paying jobs, and would have led to a quicker economic recovery. Heaven forbid that we should have had a robust economy under a Democratic president, after the massive failures under the previous Republican one.
Shame on any American who votes Republican next year. Let's put Americans back to work and repair our roads and bridges before even more of them collapse. The life you save may be your own.
Making much-needed investments in the country's infrastructure would have resulted in putting people back to work at relatively well-paying jobs, and would have led to a quicker economic recovery. Heaven forbid that we should have had a robust economy under a Democratic president, after the massive failures under the previous Republican one.
Shame on any American who votes Republican next year. Let's put Americans back to work and repair our roads and bridges before even more of them collapse. The life you save may be your own.
37
Kentucky needs a new bridge across the Ohio to Cincinnati Let Mitch pay for it..
again, another fool who can't be honest. You had the presidency and the congress. You passed the "stimulus package" which supposedly was going to be used to "rebuild America." Instead of actually doing more, you did less. It was more important for democrats to reward union voters by sharing the stimulus package with states and major cities to keep their unionized work forces at full capacity. Thus, there was very little improvement to the infrastructure. And after that, your team changed it's focus to health care.
So now we have a crumbled infrastructure and a health care system slowly sinking beneath the waves.
So now we have a crumbled infrastructure and a health care system slowly sinking beneath the waves.
1
Some observations. First cheap money has not disappeared, next borrowing has to be paid back and the interest no matter how cheap reduces the amount done. We are fools that won't raise the fuel tax to do what is needed, and insist on efficient and effective methods (no paying union rates, years of getting approvals, and other expensive requirements.
1
If you are talking about federal borrowing, note that the public debt was 47% higher as a percent of GDP in 1946. When did we ever pay that back?
It point of fact we increased the debt in dollars 75% from 1946 to 1973, but as the economy grew, it became insignificant.
It point of fact we increased the debt in dollars 75% from 1946 to 1973, but as the economy grew, it became insignificant.
4
Thank you GOP! Let's put the White House and both houses of Congress in your hands because you really know "what's going on." You proved that beyond a shadow of doubt in 2007-2008.
www.endthemadnessnow.org
www.endthemadnessnow.org
4
We have become a disinvestment society, both by government and corporations. Instead, the mentality is grab what you can now and let someone else worry about the future. We are having a going out of business sale, but the ones getting the goodies are generally the executives.
We create systems of institutionalized corruption and call it progress. The fact that we have piled more than 1 trillion dollars of the costs of running colleges and universities on eager young students is but one example. We have taken something that should be a clear benefit for the individual and society, education, and turned it into an unfair burden on the rising generation. What's not to like?
Corruption does not always arrive with the breaking of laws. It can also be found buried in everyday, accepted practices. One of the biggest mistakes of the last 50 yrs. was to tie executive compensation to stock prices, giving the executives the incentive to do anything possible to get their own big payday from the market. Corporate leaders with community spirit who had broad concern about the good of the entire society were replaced by short term managers with a pump and dump mentality toward their own stock holdings. Progress.
We are in serious decline not because it is being forced on us, but because we have lost the desire, the incentive, to build and re-build. The visions of our great grandfathers and grandmothers are being squandered and the heroes are the ones who take the most for themselves.
We create systems of institutionalized corruption and call it progress. The fact that we have piled more than 1 trillion dollars of the costs of running colleges and universities on eager young students is but one example. We have taken something that should be a clear benefit for the individual and society, education, and turned it into an unfair burden on the rising generation. What's not to like?
Corruption does not always arrive with the breaking of laws. It can also be found buried in everyday, accepted practices. One of the biggest mistakes of the last 50 yrs. was to tie executive compensation to stock prices, giving the executives the incentive to do anything possible to get their own big payday from the market. Corporate leaders with community spirit who had broad concern about the good of the entire society were replaced by short term managers with a pump and dump mentality toward their own stock holdings. Progress.
We are in serious decline not because it is being forced on us, but because we have lost the desire, the incentive, to build and re-build. The visions of our great grandfathers and grandmothers are being squandered and the heroes are the ones who take the most for themselves.
111
A few years after the fall of Rome its citizens could no longer read the inscriptions on the statutes, buildings and monuments. At the rate we are going the same thing may happen here., Where are the business people whose commerce depends on a well maintained and efficient infrastructure? The Congress nuts should get out of their airplanes and drive long distances on the interstate highway system they are responsible for. A few devastating pot holes might just jar some sense into these vacuum heads. Yeah it might cost some money but so does most other things in life worth having.
6
Where was the editor on this article? How does the failure of corporations to borrow to invest in U.S. capital expenditure have anything to do with the failure of all levels of government to maintain infrastructure?
6
Maybe things are different in NY but in many other parts of the country businesses will not move into an area unless the state and local governments built the roads, sewage systems , utilities and other forms of infrastructure that must be in place for the bidding wars to start. These local and state governments appeal to the feds to help bail them out. That's how!
1
The motivations of the corporate and public sectors are fundamentally different. Corporations are generally speaking awash in capacity (see today's quarterly report from Navistar a bellwether if ever there was) so they have no need to invest in more output. The public sector is different. The problem there is Republican obstruction of borrowing mainly at the federal level and to some extent at the state (which was certainly a missed opportunity). That said money remains exceptionally cheap and looks set to remains so for some considerable time. Indeed it may well be the new norm as is suggested by an article in this newspaper.
3
The "stimulus" was a greed fest to acquire more wealth, evade taxes, move overseas and creation of larger and larger corporations. The "stimulus" also moved this country closer to oligarchy. Those, who were lucky, were able to lock in cheap mortgages; the rare benefit for the so called 99%. But, credit card rares, and bank fess, kept climbing for the average consumer. Mostly gone; fixed credit cards below 10%. Meanwhile, the wealthy amassed even more wealth, and "too big to fail" got much larger.
Home prices not only recovered, but thanks to Chinese "investors" many markets are heading for bubbles. The weak "regulations" put into affect, after the plunge of 2008, setting teh stage for another plunge and bubble burst.
Meanwhile, out paid for politicians, and political parties, ignored the infrastructure and just about everything else. They were good on propping up Wall Street, but not Main Street. They were good at spending on wars. They were good at blaming the average American for the nation's ills (too lazy to find work and getting 99 weeks of unemployment). And, looked the other way while good jobs fly overseas.
The result, education, research, infrastructure, real domestic job creation, manufacturing, etc. are collapsing.
The 1% enjoys, while the 99% turn into peasants. And politicians who deflect the nation's real problems to fear about terrorism, Muslims, Mexicans and illegal immigration. Oh, I forgot, and blame the deficit on 47% of Americans called "takers".
Home prices not only recovered, but thanks to Chinese "investors" many markets are heading for bubbles. The weak "regulations" put into affect, after the plunge of 2008, setting teh stage for another plunge and bubble burst.
Meanwhile, out paid for politicians, and political parties, ignored the infrastructure and just about everything else. They were good on propping up Wall Street, but not Main Street. They were good at spending on wars. They were good at blaming the average American for the nation's ills (too lazy to find work and getting 99 weeks of unemployment). And, looked the other way while good jobs fly overseas.
The result, education, research, infrastructure, real domestic job creation, manufacturing, etc. are collapsing.
The 1% enjoys, while the 99% turn into peasants. And politicians who deflect the nation's real problems to fear about terrorism, Muslims, Mexicans and illegal immigration. Oh, I forgot, and blame the deficit on 47% of Americans called "takers".
14
I guess maybe next time, you'll elect a "real" leader, not some elf who believes in "leading from behind."
You mean, another George W. Bush? The man who was in charge while Wall Street was wrecking the world economy?
3
Corporations borrowed money to finance stock buybacks, mergers and executive compensation. They did not invest in the company (look at capex) and they did not raise wages. They did, however, have record profits.
83
@ Tom
Actually they borrowed mainly to restructure their debt and there is nothing wrong with mergers per se. Corporations do not borrow money to raise wages. And certainly they have experienced a strong run of profitability which is the principal cause of the rise in equity prices.
Actually they borrowed mainly to restructure their debt and there is nothing wrong with mergers per se. Corporations do not borrow money to raise wages. And certainly they have experienced a strong run of profitability which is the principal cause of the rise in equity prices.
2
Well Gee they have a duty to work for their owners, so no raises for nothing, no investing in things that won't be profitable. Now the buybacks are a bad idea in general but keeping money in low paying investments is not so good either.
welcome to planet earth. Now you know how the game is played. What's your excuse for wasting 800 billion in tax payer monies on the stimulus bill? Infrastructure was there, waiting for spending. Sadly, much of the spending was wasted in other areas. Worse, obama wasted his administration's good relationship with the american people on creating a future disaster called "obamacare."
If NJ didn't have the guts to live up to it's responsibilities, don't blame the Fed.
10
The issue isn't interest rates. It's the Republicans' irresponsible deficit obsession.
69
Well Gee it is really politicians that want to be re-elected and won't raise the taxes, combined with paying too much.
An alternative theory is that we have underestimated the strength of monopolies in the US.
20
I live in Melbourne, Australia. We don't have ultra-low interest rates but Australian cities are growing fast and the necessary infrastructure investments, particular road but also rail and air, are being made, largely through use of private-sector finance including tollway companies. Tollway assets using eletronic tagging technology and other assets such as airports are a very attractive source of stable income yield for pension funds. Why can't America harness the power of its public and private pension funds in the same way?
15
We could but tolls are not popular and many foolish persons hate corporations.
Only an undergraduate economist, but the answer is quite clear; no demand-no investment. Why no demand? Low wages and under-employment. Fix? You will need a graduate for that.
37
You are quite right about the negative effect of lack of demand, but it shouldn't take a graduate student to know that demand should have been, and still can be, stimulated by government investment in infrastructure, education, research, etc. For an example in this comment thread, see jpduffy3's remarks.
NO you won't. Financial engineering has forward-captured trillions and trillions of future earnings. The junk bond market has seen to that. There will be no wage increase or growth until that has been digested by the market, taking....decades.
Hope you are studying Keynes....
$1 billion for a railroad bridge? Seriously? No wonder this thing has been pushed to the back burner.
5
America Works tried to do infrastructure back in 2009 and almost none of the 'shovel-ready' projects got out the gate when it was discovered "needing" to do it wasn't nearly the same as "being approved" to do it. We've tied our infrastructure investment process into one huge gordian knot. And I don't foresee Hillary making it simpler, too many 'donations' needed for her foundation.
2
My thought too. If a simple railroad bridge costs $1.0 billion, the US will die a slow death on failing infrastructure. Even if this were a federal project subject to Davis-Bacon thievery, that $1.0 billion must include $500 million for graft, corruption and back-door payments to Christie's campaign.
1
What! the Federal Stimulus was supposed to help the middle class? Did I miss something?
25
Yeah, you missed the Great Compromiser shrinking the size of the stimulus and switching a lot of money from spending to tax cuts for the Upper Middle Class and above, e.g. AMT fix.
2
Great on the money article pun intended. But our chance of getting this infrastructure work hasn't been missed as raising rates will only further depress a fragile economy leading to even more deflation IMO.
2
The bridge could cost twice as much to build if federal money is involved.
Every indian artifact within 1 mile must be catalogued. There must be many community meetings. Above-average union wages of $35 per hour or more must be paid under "prevailing wage" laws. Small businesses and women and minority contractors must be hired, even though a single large general contractor could build more quickly and for less money.
The President acknowledged that under Federal stimulus funds, there "are no shovel-ready projects". It is infuriating that the people who made it so difficult to build federal infrastructure continually bewail political opposition to infrastructure spending. The existing spending would be more than enough without their own regulatory obstruction and fiscal featherbedding.
Every indian artifact within 1 mile must be catalogued. There must be many community meetings. Above-average union wages of $35 per hour or more must be paid under "prevailing wage" laws. Small businesses and women and minority contractors must be hired, even though a single large general contractor could build more quickly and for less money.
The President acknowledged that under Federal stimulus funds, there "are no shovel-ready projects". It is infuriating that the people who made it so difficult to build federal infrastructure continually bewail political opposition to infrastructure spending. The existing spending would be more than enough without their own regulatory obstruction and fiscal featherbedding.
16
Great points, but no the existing taxes don't meet the needs. Nowhere near meeting the needs.
1
Interesting. Perhaps a better solution would be to place the Muslims into work camps and then utilize them for cheap labor to build with impunity. You know, the way the Germans did it?
Maybe while my poor man's spirits were rising seeing rich men driving new Teslas, no one noticed that government policy is not the source of wealth in a world-wide trading economy.
4
It should be no surprise that corporations have not spent money on infrastructure, as they need a robust economy to justify the expense. Indeed, they make more money by borrowing at low interest and investing in the stock market, as they have been doing.
The true tragedy is the wasted opportunity to fix our crumbling infrastructure interest free. This would not only have saved the public billions in interest fees, it would have help to restore the economy so that corporations could reasonably invest in their own infrastructure, thereby stimulating the virtuous cycle needed to support enduring economic growth.
The true tragedy is the wasted opportunity to fix our crumbling infrastructure interest free. This would not only have saved the public billions in interest fees, it would have help to restore the economy so that corporations could reasonably invest in their own infrastructure, thereby stimulating the virtuous cycle needed to support enduring economic growth.
39
Corporations don't own infrastructure in general, and they have spent money on say cell towers and other potentially profitable things.
Unfortunately, today's political climate seeks to invest in the military, give tax cuts to corporate America and nothing else. Don't help those in need, don't build our infrastructure, cut educational spending, decimate health care, keep investing in oil rather than alternative energy and so on. Listen to the GOP candidates and the mantra is more war, cut social security, cut, cut, and cut.
And so we are a nation in serious decline that feeds on fear rather than hope. As our moral compass has declined, so has our ability to build a better future for Americans.
And so we are a nation in serious decline that feeds on fear rather than hope. As our moral compass has declined, so has our ability to build a better future for Americans.
118
And it is disappointing that the GOP in particular has lost the ability to distinguish "expenses" from "investments", deciding instead to block anything that might cost money no matter if the longer term benefit/return exceeds that cost.
Because, you know, expenses = Obama = socialism.
Pretty pathetic that the so-called party of business interests no longer understands ROI.
Because, you know, expenses = Obama = socialism.
Pretty pathetic that the so-called party of business interests no longer understands ROI.
8
One thing that is not really mentioned is that, if the economy is really on the mend, undertaking massive infrastructure projects now will mean there will be more competition for labor, materials, and services with the expanding private sector. Had we started a massive WPA type program at the outset and sustained it until a sound recovery was underway, we would have more badly needed infrastructure, there would have been more employment throughout the recovery period, and we all might have been better off today. Where were the visionaries when we needed them?
89
Thank the Teabillies, Paul Ryan, John Boehner, Mitch McConnell and all the members of Congress whose hatred of a black Democratic President trumped all spending on infrastructure.
4
They were there (Krugman, for one), but Congress was in the hands of the GOP, and the GOP only wants tax cuts for the rich - they have no interest in infrastructure.
13
Locked up by the GOP.
3
The Fed, like all the other central banks around the world, is nothing more than a cartel designed to serve the banks. The low interest rates has created a fantasy world for borrowers while the rest of our economy creeps along and for prices to climb. We thrive on debt. The world thrives and is run on debt. If we were all to pay off our debt we'd be in a very very dire state.
14
Yeah, if you are talking about the federal debt, we only paid it off once, in 1835, which was followed by our longest depression. In fact, every time we significantly paid it down (>10%) by eliminating deficits for more than 3 years, we fell into depression. This happened 6 times.
2
Here's a thought: Pay for the bridge with cash.
Not enough cash in the people's pockets to pay for a new bridge after 105 years? Too bad...
Pay off existing debt and save some money instead of blowing it on interest payments to financial parasites. Buy now, pay later is nothing but a recipe for debt and servitude, i.e., poverty.
Watch Puerto Rico and learn what banksters and government officials can do to the public purse.
Not enough cash in the people's pockets to pay for a new bridge after 105 years? Too bad...
Pay off existing debt and save some money instead of blowing it on interest payments to financial parasites. Buy now, pay later is nothing but a recipe for debt and servitude, i.e., poverty.
Watch Puerto Rico and learn what banksters and government officials can do to the public purse.
9
Appealing idea, but not workable in today's world. I too like to pay for everything I buy right away. But governments can't do that, it would create too much fluctuation year-to-year in budgeting. Some things are worth paying for on the installment plan. This bridge would be one of them.
23
@rocky: Not workable?
Governments make the rules...
The idea that governments cannot write the laws necessary to budget for projects and sequester money in advance is nothing but a convenient excuse.
The rules are *designed* to force the people into debt.
Moreover, the government's example is followed by ordinary people, who also seem to believe that it is impossible to live without debt.
It is truly sad...
I've watched countless people blow up their own finances because they were convinced they had no choice but to borrow money and spend beyond their means. No one ever seems to think ahead and save some money first, which is a total mystery to me.
Do some basic math and you will quickly see the folly of living in debt but, apparently, people do not learn much math in "today's world".
Life is full of choices. Anyone who tells you that you do not have any alternative to debt is telling you that you are a slave.
Governments make the rules...
The idea that governments cannot write the laws necessary to budget for projects and sequester money in advance is nothing but a convenient excuse.
The rules are *designed* to force the people into debt.
Moreover, the government's example is followed by ordinary people, who also seem to believe that it is impossible to live without debt.
It is truly sad...
I've watched countless people blow up their own finances because they were convinced they had no choice but to borrow money and spend beyond their means. No one ever seems to think ahead and save some money first, which is a total mystery to me.
Do some basic math and you will quickly see the folly of living in debt but, apparently, people do not learn much math in "today's world".
Life is full of choices. Anyone who tells you that you do not have any alternative to debt is telling you that you are a slave.
3
If that how you bought your house? A few folks can afford that, but if you adopt that as policy, you'll have very few home owners in America. And very few up to date bridges.
4